Homework Help is Here – Start Your Trial Now!
Business
Accounting
Exercise 8-22 Absorption and Variable Costing (LO 8-1, 8-4) Easton Pump Company's planned production for the year just ended was 18,800 units. This production level was achieved, and 21,30 units were sold. Other data follow: Direct material used Direct labor incurred Fixed manufacturing overhead Variable manufacturing overhead Fixed selling and administrative expenses Variable selling and administrative expenses Finished-goods inventory, January 1 $582,800 300,800 406,080 193,640 325,240 83,660 3,400 units The cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at the beginning or end of the year. Required: 1. What would be Easton Pump Company's finished-goods inventory cost on December 31 under the variable-costing method? (Do no round intermediate calculations.) 2-a. Which costing method, absorption or variable costing, would show a higher operating income for the year? 2-b. By what amount? (Do not round intermediate calculations.) 1. 2-a 2-b. Finished-goods inventory cost Higher operating income method Difference in reported income

Exercise 8-22 Absorption and Variable Costing (LO 8-1, 8-4) Easton Pump Company's planned production for the year just ended was 18,800 units. This production level was achieved, and 21,30 units were sold. Other data follow: Direct material used Direct labor incurred Fixed manufacturing overhead Variable manufacturing overhead Fixed selling and administrative expenses Variable selling and administrative expenses Finished-goods inventory, January 1 $582,800 300,800 406,080 193,640 325,240 83,660 3,400 units The cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at the beginning or end of the year. Required: 1. What would be Easton Pump Company's finished-goods inventory cost on December 31 under the variable-costing method? (Do no round intermediate calculations.) 2-a. Which costing method, absorption or variable costing, would show a higher operating income for the year? 2-b. By what amount? (Do not round intermediate calculations.) 1. 2-a 2-b. Finished-goods inventory cost Higher operating income method Difference in reported income

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Please do not give solution in image format thanku 

Exercise 8-22 Absorption and Variable Costing (LO 8-1, 8-4) Easton Pump Company's planned production for the year just ended was 18,800 units. This production level was achieved, and 21,30 units were sold. Other data follow: Direct material used Direct labor incurred Fixed manufacturing overhead Variable manufacturing overhead Fixed selling and administrative expenses Variable selling and administrative expenses Finished-goods inventory, January 1 $582,800 300,800 406,080 193,640 325,240 83,660 3,400 units The cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at the beginning or end of the year. Required: 1. What would be Easton Pump Company's finished-goods inventory cost on December 31 under the variable-costing method? (Do no round intermediate calculations.) 2-a. Which costing method, absorption or variable costing, would show a higher operating income for the year? 2-b. By what amount? (Do not round intermediate calculations.) 1. 2-a 2-b. Finished-goods inventory cost Higher operating income method Difference in reported income
Transcribed Image Text:Exercise 8-22 Absorption and Variable Costing (LO 8-1, 8-4) Easton Pump Company's planned production for the year just ended was 18,800 units. This production level was achieved, and 21,30 units were sold. Other data follow: Direct material used Direct labor incurred Fixed manufacturing overhead Variable manufacturing overhead Fixed selling and administrative expenses Variable selling and administrative expenses Finished-goods inventory, January 1 $582,800 300,800 406,080 193,640 325,240 83,660 3,400 units The cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at the beginning or end of the year. Required: 1. What would be Easton Pump Company's finished-goods inventory cost on December 31 under the variable-costing method? (Do no round intermediate calculations.) 2-a. Which costing method, absorption or variable costing, would show a higher operating income for the year? 2-b. By what amount? (Do not round intermediate calculations.) 1. 2-a 2-b. Finished-goods inventory cost Higher operating income method Difference in reported income
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS