Pandora Pillow Company's planned production for the year just ended was 21,700 units. This production level was achieved, but only 19,900 units were sold. Other data follow: $651,000 338,520 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 1 449,190 206,150 368,900 126,945 None 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 Pandora Pillow Company's finished-goods inventory cost on December 31 under the variable-costing method? (Do not 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. Finished-goods inventory cost 2-a. Higher operating income method 2-b. Difference in reported income

Pandora Pillow Company's planned production for the year just ended was 21,700 units. This production level was achieved, but only 19,900 units were sold. Other data follow: $651,000 338,520 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 1 449,190 206,150 368,900 126,945 None 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 Pandora Pillow Company's finished-goods inventory cost on December 31 under the variable-costing method? (Do not 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. Finished-goods inventory cost 2-a. Higher operating income method 2-b. Difference in reported income

Name: **Exercise 8-23: Absorption and Variable Costing (LO 8-1, 8-4)**Pando
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Description: **Exercise 8-23: Absorption and Variable Costing (LO 8-1, 8-4)**Pandora Pillow Company’s planned production for the year just ended was 21,700 units. This production level was achieved, but only 19,900 units were sold. Other data follow:- Direct mat

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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