Home / Questions / During Heaton Companys first two years of operations the company reported absorption costi...
During Heaton Company’s first two years of operations, the company reported absorption costing net operating income as follows: Year 1 Year 2 Sales (@ $62 per unit) $ 1,116,000 $ 1,736,000 Cost of goods sold (@ $30 per unit) 540,000 840,000 Gross margin 576,000 896,000 Selling and administrative expenses* 305,000 335,000 Net operating income $ 271,000 $ 561,000 * $3 per unit variable; $251,000 fixed each year. The company’s $30 unit product cost is computed as follows: Direct materials $ 6 Direct labor 9 Variable manufacturing overhead 3 Fixed manufacturing overhead ($276,000 ÷ 23,000 units) 12 Absorption costing unit product cost $ 30 Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings. Production and cost data for the two years are: Year 1 Year 2 Units produced 23,000 23,000 Units sold 18,000 28,000 Required: 1. Prepare a variable costing contribution format income statement for each year. 2. Reconcile the absorption costing and the variable costing net operating income figures for each year. (Losses should be indicated by a minus sign.)
Apr 04 2020 View more View Less
Amortization ScheduleConsider a $10,000 loan to be repaid in equal installments at the end of each of the next 5 years. The interest rate is 8%.How large must each annual...
Sep 09 20202. What type of research administers a test to people currently holding a job, then compares their scores to existing measures of job performance? a) Predictive validatio...
May 07 2021"Golden parachutes" signifies (A) Pay given to executives fired because of a takeover. (B) A clause requiring that huge dividend payments be made upon takeover. (C)...
Mar 23 2018Scores Most people have IQ scores between 70 and 130. For $39.99, you can purchase a PC or Mac program from HighIQPro that is claimed to increase your IQ score by 10 to...
May 18 2021Refer to Exercise 8.40. If we wanted to be sure that 98% of all bulbs last longer than the advertised figure, what figure should be advertised?
Mar 28 2020In which pair of Fischer projection formulas are the two monosaccharides diastereomers?
Jul 18 2021Break-Even in Units, Target Income, New Unit Variable Cost, Degree of Operating Leverage, Percent Change in Operating Income Reagan, Inc., has developed a chew-proof dog ...
Apr 03 2020Which of the following is defined as management which conducts business by standards established, by facts or truths gained through systematic observation, experiment, or...
Apr 05 2018A key metric in the cell phone industry is average revenue per user (ARPU) which represents the average dollar amount that a customer spends per store visit. In 2011, AT&...
Apr 21 2020Habard’s, a chain of hardware stores, sells a variety of tools and home repair items. One of their best wrenches sells for $5.50. Habard’s will include a three-year free ...
Jul 27 2020