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.

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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