Question

Complete this question by entering your answers in the tabs below. Reg 1A Reç 14 Reg 1B Reç 18 Reg 2A Reg za Reg 28 Reg 2B Req3 Reg 3 Assume the company uses absorption costing. Compute the unit product cost for Year 1 and Year 2. (Round your answer to 2 decimal places.) Year 1 Year 2 Unit product cost < Reg 1B Reg 2B>

Answer 1

	unit product cost
a.					Year 1	Year 2
	unit product cost				37	37
	notes
	Direct materials					21
	direct labor					14
	Variable manufacturing overhead					2
	unit product cost					37
b.		income statement
					year 1	year 2
	Sales	(40000*59);(50000*59)			2360000	2950000
	Variable expenses
	Variable cost of goods sold				1480000	1850000
	Variable selling and adm				40000	50000
	total variable expense				1520000	1900000
	Contribution margin				840000	1050000
	Fixed expense
	Fixed manufacturing overhead				240,000	240,000
	Fixed selling & adm expense				90,000	90,000
	total fixed expense				330,000	330,000
	Net income				510,000	720,000
2)	unit product cost
a)					Year 1	Year 2
	unit product cost				41.8	43
	notes					year 1	year 2
	Direct materials					21	21
	direct labor					14	14
	Variable manufacturing overhead					2	2
	FMOH (240,000/50,000)….(240,000/40000)					4.8	6
	unit product cost					41.8	43
b)		income statement
					year 1	year 2
	Sales				2360000	2950000
	cost of goods sold				1672000	2138000
	Gross margin				688000	812000
	Selling and administrative expense				130,000	140,000
	Net income				558,000	672000
	cost of goods sold for year 2 (10,000*41.8+40000*43)
3)	Reconcilaition						year 1	year 2
	Variable costing net operating income (loss)						510,000	720,000
	add:Deferrred fixed overhead in ending inventory (10000*4.8)						48,000
	less:Fixed overhead realeased in beginning inventory(10000*4.8)							-48,000
	Absoption costing net operatin income (loss)						558,000	672,000