Chapter 11, Problem 11.8E

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General accounting

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Accounting

mighty Manny, Incorporated manufactures ice scrapers and distributes them across the midwestern United States. Mighty Manny is incorporated and headquartered in Michigan. It has product sales to customers in Illinois, Indiana, Michigan, Minnesota, and Wisconsin. It has sales personnel only in the states discussed and all these states have adopted Wayfair legislation. Determine the state in which Mighty Manny does not have sales and nexus given the following scenarios:

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Thirst Quencher produced 20,000 cases of powdered drink mix and sold 17,000 cases in April. The sales price was $22 per case, variable costs were $14 per case ($10 manufacturing and $4 selling and administrative), and total fixed costs were $55,000 ($40,000 manufacturing overhead and $15,000 selling and administrative). The company had no beginning Finished Goods Inventory. Requirements1. Prepare the April income statement using absorption costing.Known - OI $87,000 2. Determine the product cost per unit and the total cost of the 3,000 cases in Finished Goods Inventory as of April 30. 3. Is the April 30 balance in Finished Goods Inventory higher or lower than variable costing? Explain why.

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