Homework Answers
1) Calculation of Unit product cost
| Unit product cost | |
| Direct materials | $9 |
| Direct labor | 10 |
| Variable manufacturing overhead | 4 |
| Unit product cost | $23 |
2)
| Year 1 | Year 2 | |
| Sales | $1080000 | $1680000 |
| Less: Variable expenses | ||
| Variable cost of goods sold | (18000*$23)= 414000 | (28000*$23)= 644000 |
| Variable selling and administrative expenses | (18000*$3)= 54000 | (28000*$3)= 84000 |
| Total variable expenses | 468000 | 728000 |
| Contribution margin | 612000 | 952000 |
| Less: Fixed expenses | ||
| Fixed manufacturing overhead | 322000 | 322000 |
| Fixed selling and administrative expenses | 250000 | 250000 |
| Total fixed expenses | 572000 | 572000 |
| Net operating income (loss) | $40000 | $380000 |
3)
| Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes | ||
| Year 1 | Year 2 | |
| Variable costing net operating income (loss) | $40000 | $380000 |
| Add: Fixed manufacturing overhead cost deferred in inventory under absorption costing (23000-18000)*$14 | 70000 | |
| Less: Fixed manufacturing overhead cost released from inventory under absorption costing (28000-23000)*14 | 70000 | |
| Absorption costing net operating income | $110000 | $310000 |
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During Heaton Company's first two years of operations, it reported absorption costing net operating Income as...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales @ $63 per unit) Cost of goods sold @ $39 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,008,000 624,000 384,000 301,000 $ 83,000 Year 2 $ 1,638,000 1,014,000 624,000 331,000 $ 293,000 * $3 per unit variable: $253,000 fixed each year. The company's $39 unit product cost is computed as follows: Direct materials Direct labor...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $60 per unit) Cost of goods sold (@ $40 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,080,000 720,000 360,000 302,000 $ 58,000 Year 2 $1,680,000 1,120,000 560,000 332,000 $ 228,000 *$3 per unit variable; $248,000 fixed each year. The company's $40 unit product cost is computed as follows: $ 8 13 Direct materials Direct...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $62 per unit) Cost of goods sold (@ $33 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,178,000 627,000 551,000 311,000 $ 240,000 Year 2 $ 1,798,000 957,000 841,000 341,000 $ 500,000 *$3 per unit variable; $254,000 fixed each year. The company's $33 unit product cost is computed as follows: Direct materials Direct labor Variable...
CO During Heaton Company's first two years of operations, it reported absorption costing net operating income...
CO During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $63 per unit) Cost of goods sold ($33 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,197,000 627,000 570,000 303,000 $ 267,000 Year 2 $1,827,000 957,000 870,000 333,000 $ 537,000 * $3 per unit variable: $246,000 fixed each year, The company's $33 unit product cost is computed as follows: Direct materials Direct labor Variable...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $60 per unit) Cost of goods sold ($30 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,140,000 570,000 570,000 305,000 $ 1265,000 Year 2 $1,740,000 870,000 870,000 335,000 $ 535,000 *$3 per unit variable: $248,000 fixed each year. The company's $30 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $63 per unit) Cost of goods sold (@ $43 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 945,000 645,000 300,000 294,000 $ 6,000 Year 2 $1,575,000 1,075,000 500,000 324,000 $ 176,000 *$3 per unit variable: $249,000 fixed each year. The company's $43 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: ear Sales ( $61 per unit) s 1,037,000 1,647,000 680,000 357,000 11080 Cost of goods sold e $40 per unit) 567,000 335,000 Gross margin Selling and administrative expenses305,000 Net operating income $152,000 232,000 $3 per unit variable; $254,000 fixed each year. The company's $40 unit product cost is computed as follows: Direet materials Direct labor Variable manufacturing overhead Pixed manufacturing overhead ($396,000 22,000...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $60 per unit) Cost of goods sold (@ $37 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,020,000 629,000 391,000 297,000 $ 194,000 Year 2 $ 1,620,000 999,000 621,000 327,000 $ 294,000 *$3 per unit variable: $246,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $ 1,612,000 962,000 650,000 332,000 Sales ( $62 per unit) Cost of goods sold (@ $37 per unit) Gross margin Selling and administrative expenses 992,000 592,000 400,000 302,000 $ 198,000\ 318,000 $ Net operating income *$3 per unit variable; $254,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing...
During Heaton Company’s first two years of operations, it reported absorption costing net operating income as...
During Heaton Company’s first two years of operations, it
reported absorption costing net operating income as follows:
Year 1
Year 2
Sales (@ $62 per unit)
$
1,054,000
$
1,674,000
Cost of goods sold (@ $38 per unit)
646,000
1,026,000
Gross margin
408,000
648,000
Selling and administrative expenses*
300,000
330,000
Net operating income
$
108,000
$
318,000
* $3 per unit variable; $249,000 fixed each year.
The company’s $38 unit product cost is computed as follows:
Direct materials
$
6...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales @ $63 per unit) Cost of goods sold @ $39 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,008,000 624,000 384,000 301,000 $ 83,000 Year 2 $ 1,638,000 1,014,000 624,000 331,000 $ 293,000 * $3 per unit variable: $253,000 fixed each year. The company's $39 unit product cost is computed as follows: Direct materials Direct labor...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $60 per unit) Cost of goods sold (@ $40 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,080,000 720,000 360,000 302,000 $ 58,000 Year 2 $1,680,000 1,120,000 560,000 332,000 $ 228,000 *$3 per unit variable; $248,000 fixed each year. The company's $40 unit product cost is computed as follows: $ 8 13 Direct materials Direct...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $62 per unit) Cost of goods sold (@ $33 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,178,000 627,000 551,000 311,000 $ 240,000 Year 2 $ 1,798,000 957,000 841,000 341,000 $ 500,000 *$3 per unit variable; $254,000 fixed each year. The company's $33 unit product cost is computed as follows: Direct materials Direct labor Variable...
CO During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $63 per unit) Cost of goods sold ($33 per unit) Gross margin Selling and administrative expenses Net operating income Year 1 $ 1,197,000 627,000 570,000 303,000 $ 267,000 Year 2 $1,827,000 957,000 870,000 333,000 $ 537,000 * $3 per unit variable: $246,000 fixed each year, The company's $33 unit product cost is computed as follows: Direct materials Direct labor Variable...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $60 per unit) Cost of goods sold ($30 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,140,000 570,000 570,000 305,000 $ 1265,000 Year 2 $1,740,000 870,000 870,000 335,000 $ 535,000 *$3 per unit variable: $248,000 fixed each year. The company's $30 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $63 per unit) Cost of goods sold (@ $43 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 945,000 645,000 300,000 294,000 $ 6,000 Year 2 $1,575,000 1,075,000 500,000 324,000 $ 176,000 *$3 per unit variable: $249,000 fixed each year. The company's $43 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: ear Sales ( $61 per unit) s 1,037,000 1,647,000 680,000 357,000 11080 Cost of goods sold e $40 per unit) 567,000 335,000 Gross margin Selling and administrative expenses305,000 Net operating income $152,000 232,000 $3 per unit variable; $254,000 fixed each year. The company's $40 unit product cost is computed as follows: Direet materials Direct labor Variable manufacturing overhead Pixed manufacturing overhead ($396,000 22,000...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $60 per unit) Cost of goods sold (@ $37 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,020,000 629,000 391,000 297,000 $ 194,000 Year 2 $ 1,620,000 999,000 621,000 327,000 $ 294,000 *$3 per unit variable: $246,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Year 1 Year 2 $ 1,612,000 962,000 650,000 332,000 Sales ( $62 per unit) Cost of goods sold (@ $37 per unit) Gross margin Selling and administrative expenses 992,000 592,000 400,000 302,000 $ 198,000\ 318,000 $ Net operating income *$3 per unit variable; $254,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing...
During Heaton Company’s first two years of operations, it
reported absorption costing net operating income as follows:
Year 1
Year 2
Sales (@ $62 per unit)
$
1,054,000
$
1,674,000
Cost of goods sold (@ $38 per unit)
646,000
1,026,000
Gross margin
408,000
648,000
Selling and administrative expenses*
300,000
330,000
Net operating income
$
108,000
$
318,000
* $3 per unit variable; $249,000 fixed each year.
The company’s $38 unit product cost is computed as follows:
Direct materials
$
6...
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