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Accounting 1,2,3 ...

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Accounting

Accounting 1,2,3 image
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Check my wo rst two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 Sales (8 $63 per unit) Cost of goods sold (8 $42 per unit) Gross margin Selling and administrative expensea* Net operating income s 1,260,000 1,890,000 840,0001,260,000 630, 000 340,000 420,000 310, 000 $ 1110,000$290,000 $3 per unit variable; $250,000 fixed each year The company's $42 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (425,000 +25,000 units) Absorption costing unit produet coat 13 S 42 Forty percent of fixed production equipment and buildings. manufacturing overhead consists of wages and salaries, the remainder consists of depreciation charges on Production and cost data for the first two years of operations are: Units produced Unit# sold Year i Year 2 25, 000 25,000 20,000 30, 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? Reconcile the absorption costing and the variable costing net operating income figures for each year

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