Forty percent of fixed manufacturing overhead consists of

Assignment Help Accounting Basics

Reference no: EM13580826

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

	Year 1	Year 2
Sales (@ $63 per unit)	$1,071,000	$1,701,000
Cost of goods sold (@ $36 per unit)	612,000	972,000
Gross margin	459,000	729,000
Selling and administrative expenses*	304,000	334,000
Net operating income (loss)	$155,000	$395,000

*$3 per unit variable; $253,000 fixed each year.

The company's $36 unit product cost is computed as follows


Direct materials	$9
Direct labor	9
Variable manufacturing overhead	1
Fixed manufacturing overhead ($374,000 ÷ 22,000 units)	17
Absorption costing unit product cost	$36

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	22,000	22,000
Units sold	17,000	27,000

Prepare a variable costing contribution format income statement for each year.

Explain to me how you get these : ( I have tried every possible solution!) the variable cost of goods sold variable selling and adimistrative expense contribution margin fixed expenses ( manufacturing overhead + selling & admistratuve expense).

Reference no: EM13580826

Questions Cloud

Based on the preceding information what amount would be : on january 1 2008 wilhelm corporation acquired 90 percent of kaiser companys voting stock at underlying book value. the

Aug 31submit and record your bill for the accounting : aug 31?submit and record your bill for the accounting services for the month to set up the records for jens tennis

Cabinets inc is a large manufacturer of modular kitchen : cabinets inc. is a large manufacturer of modular kitchen cabinets sold primarily to builders and developers. the

The following information reflects cash flow and other : the following information reflects cash flow and other activities of framer company for six months ended june 30 paid

Forty percent of fixed manufacturing overhead consists of : during heaton companys first two years of operations the company reported absorption costing net operating income as

Biando corporation began operations on may 1 2010 and : biando corporation began operations on may 1 2010 and completed the following transactions during its first month of

Indicate the balances in the three stockholders equity : on october 1 chile corporations stockholders equity is as follows.common stock 4 par

Allocate the depreciation intrest and taxes occupancy costs : 1. allocate occupancy costs to the diaz and wright departments using the current allocation method.2. allocate the

Stallman company took a physical inventory on december 31 : stallman company took a physical inventory on december 31 and determined that goods costing 275260 were on hand. not

User Account

All Pages