Vignette #3 Whistler, Inc., manufactures a specialized snowboard made for the advanced snowboarder. Whistler began 2014 with an inventory of 240 snowboards. During the year, it produced 900 boards and sold 995 for $750 each. Fixed production costs were $280,000, and variable production costs were $325 per unit. Whistler uses a denominator level of 1,000 units. Production-volume variances are written off to cost of goods sold. Fixed advertising, marketing, and other general and administrative expenses were $112,000, and variable shipping costs were $15 per board. Assume that the cost of each unit in beginning inventory is equal to 2014 inventory cost. 8. Using variable costing, the value of the 2014 beginning inventory (in USD) is closest to 9. 10. A. 78,000 B. 180,000 C. 81,600 Using variable costing, the breakeven quantity of snowboards (in units) to cover fixed costs is closest to A. 520 B. 960 C. 1,150 Under absorption costing, the ending inventory (in units) of snowboards is closest to A. 335 B. 245 C. 145
Vignette #3 Whistler, Inc., manufactures a specialized snowboard made for the advanced snowboarder. Whistler began 2014 with an inventory of 240 snowboards. During the year, it produced 900 boards and sold 995 for $750 each. Fixed production costs were $280,000, and variable production costs were $325 per unit. Whistler uses a denominator level of 1,000 units. Production-volume variances are written off to cost of goods sold. Fixed advertising, marketing, and other general and administrative expenses were $112,000, and variable shipping costs were $15 per board. Assume that the cost of each unit in beginning inventory is equal to 2014 inventory cost. 8. Using variable costing, the value of the 2014 beginning inventory (in USD) is closest to 9. 10. A. 78,000 B. 180,000 C. 81,600 Using variable costing, the breakeven quantity of snowboards (in units) to cover fixed costs is closest to A. 520 B. 960 C. 1,150 Under absorption costing, the ending inventory (in units) of snowboards is closest to A. 335 B. 245 C. 145
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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