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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$60 per unit) Cost of goods sold (@ $39 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable; $249,000 fixed each year. The company's $39 unit product cost is computed as follows: Units produced Units sold Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($408,000 + 24,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Required 1 Year 1 Year 2 $ 1,140,000 $1,740,000 1,131,000 609,000 336,000 $ 273,000 Year 1 24,000 19,000 Required 2 Unit product cost 741,000 399,000 306,000 $ 93,000 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year. Complete this question by entering your answers in the tabs below. Required 3 Year 2 24,000 29,000 Using variable costing, what is the unit product cost for both years? $ 10 11 1 17 $ 39 < Required 1 Required 2 >

During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$60 per unit) Cost of goods sold (@ $39 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable; $249,000 fixed each year. The company's $39 unit product cost is computed as follows: Units produced Units sold Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($408,000 + 24,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Required 1 Year 1 Year 2 $ 1,140,000 $1,740,000 1,131,000 609,000 336,000 $ 273,000 Year 1 24,000 19,000 Required 2 Unit product cost 741,000 399,000 306,000 $ 93,000 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year. Complete this question by entering your answers in the tabs below. Required 3 Year 2 24,000 29,000 Using variable costing, what is the unit product cost for both years? $ 10 11 1 17 $ 39 < Required 1 Required 2 >

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 54E: Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects...
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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$60 per unit) Cost of goods sold (@$39 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable; $249,000 fixed each year. The company's $39 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($408,000 24,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Required 1 Year 1 Year 2 $ 1,140,000 $1,740,000 1,131,000 741,000 399,000 306,000 $ 93,000 Year 1 24,000 19,000 Required 2 Unit product cost Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year. Year 2 24,000 29,000 Complete this question by entering your answers in the tabs below. Required 3 Using variable costing, what is the unit product cost for both years? 609,000 336,000 $ 273,000 $ 10 11 1 17 $ 39 < Required 1 Required 2 >
Transcribed Image Text:During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$60 per unit) Cost of goods sold (@$39 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable; $249,000 fixed each year. The company's $39 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($408,000 24,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Required 1 Year 1 Year 2 $ 1,140,000 $1,740,000 1,131,000 741,000 399,000 306,000 $ 93,000 Year 1 24,000 19,000 Required 2 Unit product cost Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year. Year 2 24,000 29,000 Complete this question by entering your answers in the tabs below. Required 3 Using variable costing, what is the unit product cost for both years? 609,000 336,000 $ 273,000 $ 10 11 1 17 $ 39 < Required 1 Required 2 >
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