Please do not give solution in image format thanku Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation [LO,6-1, LO6-2, LO6-3]During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows:During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows:Year 1Year 2$ 1,071,000$ 1,701,000Sales (@ $63 per unit)Cost of goods sold (@ $32 per unit)Gross marginSelling and administrative expenses*Net operating income*$3 per unit variable; $249,000 fixed each year.The company's $32 unit product cost is computed as follows:Direct materialsDirect laborUnits producedUnits soldUnits producedUnits soldVariable manufacturing overheadFixed manufacturing overhead ($308,000 + 22,000 units)Absorption costing unit product costProduction and cost data for the first two years of operations are:Year 1Year 222,00017,000Year 122,000544,00017,000527,000300,000$ 227,00022,00027,000Year 222,00027,000864,000837,000330,000$ 507,000$710114$32Required: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.

The net income is calculated as difference between revenues and expenses. The absorption costing…

Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation [LO,6-1, LO6-2, LO6-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 $ 1,071,000 Sales (@ $63 per unit) Cost of goods sold (@ $32 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable; $249,000 fixed each year. The company's $32 unit product cost is computed as follows: Units produced Direct materials Direct labor Units sold Variable manufacturing overhead Fixed manufacturing overhead ($308,000 ÷ 22,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 22,000 544,000 527,000 300,000 17,000 $ 227,000 22,000 27,000 Year 2 $ 1,701,000 864,000 837,000 330,000 $ 507,000 $7 10 1 14 $32

Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation [LO,6-1, LO6-2, LO6-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 $ 1,071,000 Sales (@ $63 per unit) Cost of goods sold (@ $32 per unit) Gross margin Selling and administrative expenses* Net operating income *$3 per unit variable; $249,000 fixed each year. The company's $32 unit product cost is computed as follows: Units produced Direct materials Direct labor Units sold Variable manufacturing overhead Fixed manufacturing overhead ($308,000 ÷ 22,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Year 1 Year 2 22,000 544,000 527,000 300,000 17,000 $ 227,000 22,000 27,000 Year 2 $ 1,701,000 864,000 837,000 330,000 $ 507,000 $7 10 1 14 $32

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

Chapter2: Basic Managerial Accounting Concepts

Section: Chapter Questions

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Problem 6-19 (Algo) Variable Costing Income Statement; Reconciliation [LO,6-1, LO6-2, LO6-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $1,220,000 $1,830,000 780,000 1,170,000 440,000 313,000 $ 127,000 Sales (@ $61 per unit) Cost of goods sold (@ $39 per unit) Gross margin Selling and administrative expenses* Net operating income * *$3 per unit variable; $253,000 fixed each year. The company's $39 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($450,000 ÷ 25,000 units) Absorption costing unit product cost Production and cost data for the first two years of operations are: Units produced Units sold Year 1 25,000 20,000 Year 2 25,000 30,000 660,000 343,000 $ 317,000 $7 10 4 18 $ 39 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income…
Problem 3 (Variable Costing Income Statement; Reconciliation) During Floppy Company's first two years of operations, the company reported net operating income as follows (absorption costing basis): Year 1 Year 2 Sales (at P50 per unit) Less cost of goods sold: Beginning inventory Add cost of goods manufactured (at P34 per unit) Goods available for sale P1,000,000 P1,500,000 170,000 850,000 850,000 170,000 680,000 320,000 310,000 P 10,000 850,000 1,020,000 Less ending inventory (at P34 per unit) Cost of goods sold Gross margin Less selling and administrative expenses* Net operating income 1,020,000 480,000 340,000 P 140,000 P3 per unit variable; P250,000 fixed each year.
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