Whitman Company has just completed its first year of operations. The company’s absorption costing income statement for the year appears below:

  

 

The company’s selling and administrative expenses consist of $292,500 per year in fixed expenses and $4 per unit sold in variable expenses. The $22 per unit product cost given above is computed as follows:

  

 

Pl make the co's income statement :

1. Prepare the company’s income statement in the contribution format using variable costing.

                                               White Comany

                                 Variable costing income statement

Variable Expenses

Fixed Expenses

 

   

 2- Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement.

Reconciliation of variable costing and absorption costing net operating income

variable costing net operating income ( loss)

Absorption costing net operating income (loss0

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

  

 

* $3 per unit variable; $246,000 fixed each year. 

The company’s $38 unit product cost is computed as follows: 

 

 

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:

  

 

Required:

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

 

 

4-. Reconcile the absorption costing and the variable costing net operating income figures for each year.

 

Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement shown below:

 

 

Required:

5- Compute the companywide break-even point in dollar sales.

 

 

2. Compute the break-even point in dollar sales for the North region.

 

 

6- Compute the break-even point in dollar sales for the South region.