Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. during heaton company's first two years of operati

During Heaton Company's first two years of operations, it reported absorption costing net operating income...

70.2K

Verified Solution

Question

Accounting

image

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) Cost of goods sold $37 per unit) Gross margin Selling and administrative expenses Net operating income $ 1,159,000 1,769,000 1,073,000 696,000 335,000 $1151,000 361,000 703,000 456,00e 305,000 $3 per unit variable: $248,000 fixed each year The company's $37 unit product cost is computed as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($384,000 24,000 units) Absorption costing unit product cost 12 16 $ 37 Forty percent of fixed manufacturing overhead consists of wages and salaries, the remainder consists of depreciation charges production equipment and buildings Production and cost data for the first two years of operatons are Units produced Units sold Year 1 Year 2 24,000 24,000 19,000 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. Answer is not complete

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students