During Heaton Company’s first two years of operations, the company reported absorption costing n

During Heaton Company's first two years of operations, the company reported absorption costing net operating Income as follows: Sales ($63 per unit) Cost of goods sold ($37 per unit) Gross margin Selling and administrative expenses Net operating Income (loss) Year 1 $1,008,000 592,000 416,000 295,000 $121,000 Year 2 $1,638,000 962,000 676,000 325,000 $351,000 *$3 per unit variable; $247,000 fixed each year. The company's $37 unit product cost is computed as follows Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($294.000 + 21,000 units) Absorption costing unit product cost Forty percent of fixed manufacturing overhead consists of wages and salarles; the remainder consists of depreciation charges on production equipment and buildings. Production and cost data for the two years are: Units produced Units sold Year 1 21,000 16,000 Year 2 21,000 26,000 Requirement 1: Prepare a variable costing contribution format income statement for each year. (Input all amount as positive value. In case of not operating loss it should be indicated with a minus sign. Omit the “S” sign in your response.) Year 1 Year 2 (Click to select) Variable expenses: (Click to select) (Click to select) Total variable expenses (Click to select) Fixed expenses: (Click to select) (Click to select) Total fixed expenses Net operating income/(loss) Requirement 2: Determine the absorption costing and variable costing net operating income figures for each year. (Negative amount should be indicated by a minus sign. Omit the “S” sign in your response.) Year 1 Year 2 Variable costing net operating income Add/(deduct): Fixed manufacturing overhead deferred in inventory under absorption costing Absorption costing net operating income

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