DeAnne Company produces a single product. The company's variable costing income statement for August appears below: DeAnne Company Income statement For the month ended August 31 Sales ($19 per unit) $ 7,98,000 Variable expenses: Variable cost of goods sold 3,78,000 Variable selling expense 84,000 Total variable expenses Contribution margin Fixed expenses: 4,62,000 3,36,000 Fixed manufacturing Fixed selling and administrative Total fixed expenses Net operating income 1,11,000 37,000 1,48,000 $ 1,88,000 The company produced 37,000 units in August and the beginning inventory consisted of 10,000 units. Variable production costs per unit and total fixed costs have remained constant over the past several months. The value of the company's inventory on August 31 under the absorption costing method is: a. $45,000 b. $60,000 c. $74,405 d. $70,000

Cornerstones of Cost Management (Cornerstones Series)
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Chapter2: Basic Cost Management Concepts
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Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...
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Answer to following general account questions

DeAnne Company produces a single product. The company's variable
costing income statement for August appears below:
DeAnne Company
Income statement
For the month ended August 31
Sales ($19 per unit)
$ 7,98,000
Variable expenses:
Variable cost of goods sold
3,78,000
Variable selling expense
84,000
Total variable expenses
Contribution margin
Fixed expenses:
4,62,000
3,36,000
Fixed manufacturing
Fixed selling and administrative
Total fixed expenses
Net operating income
1,11,000
37,000
1,48,000
$ 1,88,000
The company produced 37,000 units in August and the beginning
inventory consisted of 10,000 units. Variable production costs per unit
and total fixed costs have remained constant over the past several
months.
The value of the company's inventory on August 31 under the
absorption costing method is:
a. $45,000
b. $60,000
c. $74,405
d. $70,000
Transcribed Image Text:DeAnne Company produces a single product. The company's variable costing income statement for August appears below: DeAnne Company Income statement For the month ended August 31 Sales ($19 per unit) $ 7,98,000 Variable expenses: Variable cost of goods sold 3,78,000 Variable selling expense 84,000 Total variable expenses Contribution margin Fixed expenses: 4,62,000 3,36,000 Fixed manufacturing Fixed selling and administrative Total fixed expenses Net operating income 1,11,000 37,000 1,48,000 $ 1,88,000 The company produced 37,000 units in August and the beginning inventory consisted of 10,000 units. Variable production costs per unit and total fixed costs have remained constant over the past several months. The value of the company's inventory on August 31 under the absorption costing method is: a. $45,000 b. $60,000 c. $74,405 d. $70,000
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