Chapter 10, Problem 4E

The following production data came from the records of Olympic Enterprises for the year ended December 31, 2016:

During the year, 40,000 units were manufactured but only 35,000 units were sold.

Determine the effect on inventory valuation by computing the following:

1. 1. Total inventoriable costs and the cost of the 35,000 units sold and of the 5,000 units in the ending inventory, using variable costing.
2. 2. Total inventoriable costs and the cost of the 35,000 units sold and of the 5,000 units in the ending inventory, using absorption costing.