Refer to Exercise E21- 15. VitaSport produced 20,000 cases of powdered drink mix and sold 17,000 cases
Question:
Refer to Exercise E21- 15.
VitaSport produced 20,000 cases of powdered drink mix and sold 17,000 cases in April 2014. The sale price was $ 22, 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.
Requirements
1. Prepare the April income statement using absorption costing.
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.
Step by Step Answer:
Horngrens Financial and Managerial Accounting
ISBN: 978-0133255584
4th Edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura