Which inventory costing method did the client use in 2025, variable or absorption? (b) X Your answer is incorrect. How much did the client capitalize into inventory on a per-unit basis? Inventory cost per unit $ LA
Which inventory costing method did the client use in 2025, variable or absorption? (b) X Your answer is incorrect. How much did the client capitalize into inventory on a per-unit basis? Inventory cost per unit $ LA
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:(a1)
Which inventory costing method did the client use in 2025, variable or absorption?
(b)
* Your answer is incorrect.
How much did the client capitalize into inventory on a per-unit basis?
Inventory cost per unit $
Transcribed Image Text:Margaret is studying the working papers from her client's 2025 income statement because her manager wants her to reconstruct that same income statement without the benefit of first seeing the finished product. She
knows the client uses standard costing within its accounting system, but she has to figure out which inventory costing method it uses. The working paper shows the following details. No other variances were reported, and
the prior year per-unit costs were the same as the 2025 per-unit costs.
Gross margin
Sales volume
Budgeted production
Beginning FG Inventory
Ending FG Inventory
Fixed-MOH volume variance (unfavorable)
Operating income
Sales
$2,864
190 units
210 units
27 units
39 units
$176
$570
$14,250
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