Envelope Company had the following information during the previous year for one of its product lines: Sales price per unit: $450 • Units in beginning inventory: 0 • Units started during the year: 35,000 • Units sold: 28,000 Variable costs per unit: ● ● Direct materials: $70 • Direct labor: $180 • Variable overhead costs: $50 Fixed costs: • Fixed overhead per unit: $30 • General and administrative: $1,000,000 To Do 1. Calculate the ending inventory value and prepare an income statement using absorption costing. 2. Calculate the ending inventory value and prepare an income statement using variable
Envelope Company had the following information during the previous year for one of its product lines: Sales price per unit: $450 • Units in beginning inventory: 0 • Units started during the year: 35,000 • Units sold: 28,000 Variable costs per unit: ● ● Direct materials: $70 • Direct labor: $180 • Variable overhead costs: $50 Fixed costs: • Fixed overhead per unit: $30 • General and administrative: $1,000,000 To Do 1. Calculate the ending inventory value and prepare an income statement using absorption costing. 2. Calculate the ending inventory value and prepare an income statement using variable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Envelope Company had the following information
during the previous year for one of its product
lines:
• Sales price per unit: $450
• Units in beginning inventory: 0
• Units started during the year: 35,000
• Units sold: 28,000
Variable costs per unit:
• Direct materials: $70
• Direct labor: $180
• Variable overhead costs: $50
Fixed costs:
• Fixed overhead per unit: $30
• General and administrative: $1,000,000
To Do
1. Calculate the ending inventory value and
prepare an income statement using
absorption costing.
2. Calculate the ending inventory value and
prepare an income statement using variable
costing.
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