The following information pertains to Vladamir, Inc., for last year: Beginning inventory, units 1,400 Units produced 100,000 Units sold 101,000 Variable costs per unit: Direct materials $8.00 Direct labor $9.00 Variable overhead $1.00 Variable selling expenses Fixed costs per year: Fixed overhead $2.00 $300,000 Fixed selling and administrative expenses $230,000 There are no work-in-process inventories. Normal activity is 100,000 units. Expected and actual overhead costs are the same. Costs have not changed from one year to the next. Required: 1. How many units are in ending inventory? 2. Without preparing an income statement, indicate what the difference will be between variable-costing income and absorption-costing income. 3. Assume the selling price per unit is $32. Prepare an income statement using (a) variable costing and (b) absorption costing.

The following information pertains to Vladamir, Inc., for last year: Beginning inventory, units 1,400 Units produced 100,000 Units sold 101,000 Variable costs per unit: Direct materials $8.00 Direct labor $9.00 Variable overhead $1.00 Variable selling expenses Fixed costs per year: Fixed overhead $2.00 $300,000 Fixed selling and administrative expenses $230,000 There are no work-in-process inventories. Normal activity is 100,000 units. Expected and actual overhead costs are the same. Costs have not changed from one year to the next. Required: 1. How many units are in ending inventory? 2. Without preparing an income statement, indicate what the difference will be between variable-costing income and absorption-costing income. 3. Assume the selling price per unit is $32. Prepare an income statement using (a) variable costing and (b) absorption costing.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 28P: The following information pertains to Vladamir, Inc., for last year: There are no work-in-process...

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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

The following information pertains to Vladamir, Inc., for last year:
Beginning inventory, units
Units produced
1,400
100,000
Units sold
101,000
Variable costs per unit:
Direct materials
$8.00
Direct labor
$9.00
Variable overhead
$1.00
Variable selling expenses
$2.00
Fixed costs per year:
Fixed overhead
$300,000
Fixed selling and administrative expenses
$230,000
There are no work-in-process inventories. Normal activity is 100,000 units. Expected and actual
overhead costs are the same. Costs have not changed from one year to the next.
Required:
1. How many units are in ending inventory?
2. Without preparing an income statement, indicate what the difference will be between
variable-costing income and absorption-costing income.
3. Assume the selling price per unit is $32. Prepare an income statement using (a) variable
costing and (b) absorption costing.

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