80.2K

Verified Solution

Link Copied!

During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales ( $64 per unit) Cost of goods sold ( $37 per unit) Gross margin Seling and administrative expenses* Net operating income $ 1,152,000 1,792,000 666,000 1,038,000 756,000 300,000 330,000 $ 186000 425,000 486,000 $3 per unit variable; $246,000 fixed each year. The company's $37 unit product cost is computed as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($414,000 Absorption costing unil product cost 23,000 units) 18 S 37 Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings. Production and cost data for the first two years of operations are Year 1 Year 2 23,000 23,000 Units produced of 3 10/29/18, 742 P Units sold 18,000 29,000 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 1 Required 2 Required 3 Reconcile the absorption costing and the variable costing net operating income figures for each year Reconcililation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 Variable costing net operating income (oss) Absorption costing net operating income Required 3>

Answer & Explanation Solved by verified expert

See Answer