Solution-What is the unit product cost for both years

What is the unit product cost for both years

Assignment Help Managerial Accounting

Reference no: EM133132997

Question - During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows:

	Year 1	Year 2
Sales (@ $63 per unit)	$1,197,000	$1,827,000
Cost of goods sold (@ $40 per unit)	760,000	1,160,000
Gross margin	437,000	667,000
Selling and administrative expenses*	305,000	335,000
Net operating income	$132,000	$332,000

* $3 per unit variable; $248,000 fixed each year.

The company's $40 unit product cost is computed as follows:

Direct materials	$9
Direct labor	13
Variable manufacturing overhead	2
Fixed manufacturing overhead ($384,000 ÷ 24,000 units)	16
Absorption costing unit product cost	$40

Production and cost data for the first two years of operations are:

	Year 1	Year 2
Units produced	24,000	24,000
Units sold	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.

Reference no: EM133132997

Questions Cloud

Explain motivated behaviors : Discuss how hedonism can explain some motivated behaviors. Identify and describe the characteristics of molar behavior.

Communicate to your profession and to public : What will you communicate to your profession and to the public? Please include a personal narrative that reveals why this platform is important to you.

What is the correct cash balance of Nica Company at December : Petty cash funds (all funds were replenished on December 31, 2008) 30,000. What is the correct cash balance of Nica Company at December 31, 2022

Calculate the Deferred Tax Asset or Deferred Tax Liability : Tax rates enacted at December 31, 2019 were 33% for 2019, 32% for 2020, 31% for 2021, Calculate the Deferred Tax Asset or Deferred Tax Liability

What is the unit product cost for both years : During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: What is unit product cost for both years

Prepare a situational analysis of a business : Explain the role of leadership in changing organizational environment and Prepare a situational analysis of a business

What is the correct category for each item : Torikatsu Company purchased a machine for P 100,000; current accumulated depreciation totals P 40,000. What is the correct category for each item

Purpose of a conceptual framework for financial reporting : Explain, describe, and demonstrate mastery of the financial accounting standard setting process of Australia - Critically analyse and interpret current issues

BHS000-6 Biotechnology Research Project Assignment : BHS000-6 Biotechnology Research Project Assignment Help and Solution, University of Bedfordshire - Assessment Writing Service

User Account

All Pages

What is the unit product cost for both years

Reference no: EM133132997

Reference no: EM133132997

Questions Cloud

Reviews

Write a Review

Managerial Accounting Questions & Answers

Manage budgets and financial plans

Prepare a retained earnings statement

Prepare a master budget for the three-month period

Construct the companys direct labor budget

Evaluate the predetermined overhead rate

Determine the company''s bid

Compute the pool rates for the different activities

Prepare Company financial statements

Prepare an analysis of terracycles

Discuss the ethical issues

Political resources in emerging markets

Management accounting - ehsan electronics company

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT