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File Edit View History Bookmarks Window Help hapter 6 Homework Help Sav Problem 6-19 Variable Costing Income Statement; Reconciliation [LO6-2, L06-3] During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows 42 oints Sales e $62 per unit) Cost of goods sold ( $29 per unit) Gross margin Selling and administrative expenses Net operating income s 1,178,000 $ 1,798,000 51,000 841,000 957,000 627,000 305 000335 000 s 1322,000$ 622,000 eBook Print $3 per unit variable; $248,000 fixed each year. The company's $29 unit product cost is computed as follows Direct materials Direct labor Variable manufacturing overhead Pixed manafacturing overhead ($264,000 24,000 units) Absorption costing unit product cost s 29 d manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on Production and cost data for the first two years of operations are Units produced Units sold Year 1 Year 2 24,000 24,000 19,000 29,000 Prev 5 or 7 Next >

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Solution 2:

Solution 3:

Computation of Unit Product Cost - Variable Costing Particulars Year 1 Year 2 Unit Product Cost: Direct material $7.00 $7.00 Direct Labor $9.00 $9.00 Variable manufacturing overhead $2.00 $2.00 Unit product cost - Variable costing $18.00 $18.00

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