value 10.00 points During Heaton Company\'s first two years of operations, the c

Question

value 10.00 points During Heaton Company's first two years of operations, the company reported absorption costing net operating income as follows Sales (@ $61 per unit) Cost of goods sold (@ S37 per unit) $ 976,000 $ 1,586,000 592,000 962,000 Gross margin Selling and administrative expenses 384,000 297 600 624,000 327,600 Net operating income $ 86 400 $296,400 $3 per unit variable, $249,600 fixed each year The company's $37 unit product cost is computed as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($378,000 + 21000 units) 18 -- O Type here to search

Explanation / Answer

Heaton Company Variable costing Income statement Per unit Year 1 Year 2 Sales 61 976000 1586000 Variable expenses Variable cost of goods sold 19 304000 494000 Variable selling & administrative expenses 3 48000 78000 Total variable expenses 22 352000 572000 Contribution margin 39 624000 1014000 Fixed costs Fixed manufacturing overhead 378000 378000 Fixed selling & administrative expenses 249600 249600 Total fixed costs 627600 627600 Net Operating Income -3600 386400

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