? ? ezio.mheducation.com/hm.tpx Problem 6-19 Variable Costing Income Statement;

Question

? ? ezio.mheducation.com/hm.tpx Problem 6-19 Variable Costing Income Statement; Reconciliation [LO6-2, LO6-3] During Healon Company's first two years of operalions, the ?rnpany leported absorption costing net operating income as follows Sales ($81 per unit) Cost of goods sod 35 per unit) S 9r5 0DD 16 io0 10,000 560 00D Gross margin Selling and administrative expenses 416,000 298,000 676,000 328,000 Net operting income S 118,00D S 348,000 $3 per unit varisble $250 000 fixed each yeer The campany's $15 unit product cost s computed as tolows S 10 Direct materials Direct labor Vanable manutactunng overhead Fxed manutactunng cwemead ( 21 x units) 13 Absorplion costunit producl cost S 35 Forly porcent of lixcd manufacluring overhead cosits f waes and salaris, the remaiir conists of depreciation charges on production equiprment ad budings Production and cost data for the two years are: Year 1 Year 2 Units produced Unils sol 16,000 26,000 Required: 1. Prepare vanable costing contribution format income statement for each year Sample Problem . jpo FIN401 Module T.w... pdf Show all sample Problem S... og O Type here to search 7/5/2018

Explanation / Answer

Year 1 Year 2 Sales 976000 $1,586,000 Variable expenses: Variable cost of goods sold 352000 572000 Variable selling and administrative expenses 48000 78000 Total Variable expenses 400000 650000 Contribution margin 576000 936000 Fixed expenses: Fixed manufacturing overhead 273000 273000 Fixed selling and administrative expenses 250000 250000 Total Fixed expenses 523000 523000 Net operatimg income(loss) $53,000 $413,000 2 Year 1 Year 2 Variable costing net income $53,000 $413,000 Add(deduct) fixed manufacturing overhead deferred in(released) 65000 -65000 Absorption costing net operating income $118,000 $348,000

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