During Heaton Company's first two years of operations, it reported absorption costing net operating Income as follows: Sales (@$63 per unit) Cost of goods sold (@ $36 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $251,000 fixed each year. Year 2 Year 1 $ 1,071,000 $ 1,701,000 612,000 972,000 459,000 302,000 729,000 332,000 $ 157,000 $ 397,000 The company's $36 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($352,000 22,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: $ 5 11 4 16 $ 36 Units produced Units sold Required: Year 1 22,000 17,000 Year 2 22,000 27,000 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.

During Heaton Company's first two years of operations, it reported absorption costing net operating Income as follows: Sales (@$63 per unit) Cost of goods sold (@ $36 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $251,000 fixed each year. Year 2 Year 1 $ 1,071,000 $ 1,701,000 612,000 972,000 459,000 302,000 729,000 332,000 $ 157,000 $ 397,000 The company's $36 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($352,000 22,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: $ 5 11 4 16 $ 36 Units produced Units sold Required: Year 1 22,000 17,000 Year 2 22,000 27,000 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.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter26: Manufacturing Accounting: The Job Order Cost System

Section: Chapter Questions

Problem 1CP

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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follws: Year 2 Sales (e $64 per unit) Cost of goods sold (e $37 per unit) Gross margin Selling and administrative expenses Year 1 $ 1,152, 000 $ 1,792, 000 666, 000 486, 000 301, 000 $ 185, 000 1,836, 000 756, 000 331, 000 $ 425, 000 Net operating incone •$3 per unit varlable, $247,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufactüring overhead ($391, 00e + 23, 000 units) $ 6 10 4. 17 $ 37 Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Year 1 23, 000 18, 000 Year 2 23, 000 28, 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…
During Heaton Company's first two years of operations, It reported absorption costing net operating income as follows: Sales (e $63 per unit) Cost of goods sold (e $37 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,071,000 629,000 442,000 298,000 $ 144,000 Year 2 $ 1,701,000 999,000 702,000 328,000 $ 374,000 $3 per unit variable; $247,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($374,000 + 22,000 units) Absorption costing unit product cost $ 5 10 17 $ 37 Production and cost data for the first two years of operations are: Year 1 22,000 17,000 Year 2 Units produced Units sold 22,000 27,000 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…
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $64 per unit) Cost of goods sold (@ $36 per unit) Gross margin Year 1 $ 1,152,000 648,000 504,000 302,000 $ 202,000 Year 2 $ 1,792,000 1,008,000 784,000 332,000 $ 452,000 Selling and administrative expenses* Net operating income * $3 per unit variable; $248,000 fixed each year. The company's $36 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($345,000 ÷ 23,000 units) Absorption costing unit product cost $ 9 10 2 15 $ 36 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 23,000 23,000 18,000 28,000 Units sold 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…
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $61 per unit) $ 1,098,000 $ 1,708,000 Cost of goods sold (@ $38 per unit) 684,000 1,064,000 Gross margin 414,000 644,000 Selling and administrative expenses* 306,000 336,000 Net operating income $ 108,000 $ 308,000 * $3 per unit variable; $252,000 fixed each year. The company’s $38 unit product cost is computed as follows: Direct materials $ 6 Direct labor 9 Variable manufacturing overhead 3 Fixed manufacturing overhead ($460,000 ÷ 23,000 units) 20 Absorption costing unit product cost $ 38 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced 23,000 23,000 Units sold 18,000 28,000 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net…
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $ 1,037,000 $ 1,647,000 945,000 Sales (@ $61 per unit) Cost of goods sold (@ $35 per unit) Gross margin Selling and administrative expenses* 595,000 442,000 303,000 702,000 333,000 Net operating income $4 139,000 369,000 $3 per unit variable; $252,000 fixed each year. The company's $35 unit product cost is computed as follows: Direct materials 7 Direct labor 8. Variable manufacturing overhead Fixed manufacturing overhead ($418,000 + 22,000 units) 1 19 Absorption costing unit product cost $ 35 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced Units sold 22,000 17,000 22,000 27,000 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…