# During Heaton Companys first two years of operations- the company repo.docx

8 de Feb de 2023
1 de 2

### During Heaton Companys first two years of operations- the company repo.docx

• 1. During Heaton Companyâ€™s first two years of operations, the company reported absorption costing net operating income as follows: Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings. Prepare a variable costing contribution format income statement for each year. Reconcile the absorption costing and the variable costing net operating income figures for each year. (Losses should be indicated by a minus sign.) During Heaton Companyâ€™s first two years of operations, the company reported absorption costing net operating income as follows: Solution 1) variable cost of manufacturing = 7+9+2 = 18 2) Year 1 year2 sales 976.000 1,586,000 less:Variable cost of goods sold Beginning inventory - (90,000) [5000*18] Variable cost of goods manufactured (378,000) (378000) closing Inventory 90,000 - Gross contribution margin 688,000 1,118,000 less:variable selling expenses (48,000) (78000)Â Â Â Â Â [26000*3] Less:Period cost Fixed manufacturing cost (294,000) (294,000)
• 2. Fixed selling cost (255,000) (255,000) net income 91,000 491,000