A company has a normal production level of 200,000 units per year, and production that is more than 5% from this level is considered abnormal. Fixed overhead costs are $800,000 Requirement For the following production levels, determine the amount of fixed overhead that should be capitalized in inventories and the amount that should be directly expensed. ("Directly expensed does not include a recognized when the units are sold) (Enter a "0" for amounts with a zero balance) Amount Amount capitalized into Production directly level inventories expensed 220,000 units 210,000 units 200.000 units 195,000 units 100,000 units 50,000 units

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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A company has a normal production level of 200.000 units per year, and production that is more than +/-5% from this level is considered abnormal. Fixed overhead costs are $800,000.
Requirement
For the following production levels, determine the amount of fixed overhead that should be capitalized in inventories and the amount that should be directly expensed. ("Directly expensed does not include a
recognized when the units are sold.) (Enter a "0" for amounts with a zero balance)
Amount
Amount
capitalized into
directly
Production
level
inventories
expensed
220,000 units
210.000 units
200.000 units
195,000 units
100,000 units
50,000 units
Transcribed Image Text:A company has a normal production level of 200.000 units per year, and production that is more than +/-5% from this level is considered abnormal. Fixed overhead costs are $800,000. Requirement For the following production levels, determine the amount of fixed overhead that should be capitalized in inventories and the amount that should be directly expensed. ("Directly expensed does not include a recognized when the units are sold.) (Enter a "0" for amounts with a zero balance) Amount Amount capitalized into directly Production level inventories expensed 220,000 units 210.000 units 200.000 units 195,000 units 100,000 units 50,000 units
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