5. A company has £8.00 per unit in variable production cost and £3.00 per unit in variable selling and administrative cost. The annual fixed production cost is £300,000. The annual fixed selling and administrative cost is £50,000. Complete the table below for the number of units and dollar value of ending inventory for each year. Assume a FIFO flow. a. Units Produced Units Sold Units in ending inventory Ending inventory using variable costing Ending inventory using full costing b. 2004 120,000 110,000 2005 150,000 120,000 2006 100,000 140,000 2007 100,000 100,000 Assume that the selling price and cost structure stayed the same over the 4-year period. How would the total income compare over the period between variable and full costing?
5. A company has £8.00 per unit in variable production cost and £3.00 per unit in variable selling and administrative cost. The annual fixed production cost is £300,000. The annual fixed selling and administrative cost is £50,000. Complete the table below for the number of units and dollar value of ending inventory for each year. Assume a FIFO flow. a. Units Produced Units Sold Units in ending inventory Ending inventory using variable costing Ending inventory using full costing b. 2004 120,000 110,000 2005 150,000 120,000 2006 100,000 140,000 2007 100,000 100,000 Assume that the selling price and cost structure stayed the same over the 4-year period. How would the total income compare over the period between variable and full costing?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:5. A company has £8.00 per unit in variable production cost and £3.00 per unit
in variable selling and administrative cost. The annual fixed production cost
is £300,000. The annual fixed selling and administrative cost is £50,000.
a.
Complete the table below for the number of units and dollar value of
ending inventory for each year. Assume a FIFO flow.
Units Produced
Units Sold
Units in ending
inventory
Ending inventory
using variable
costing
Ending inventory
using full costing
b.
2004
120,000
110,000
2005
150,000
120,000
2006
100,000
140,000
2007
100,000
100,000
Assume that the selling price and cost structure stayed the same over
the 4-year period. How would the total income compare over the
period between variable and full costing?
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