Absorption and Variable Costing Comparisons Red Arrow Blueberries manufactures blueberry jam. Because of bad weather, its blueberry crop was small. The following data have been gathered for the summer quarter of 2017:

Required

a. Prepare a functional income statement for the quarter using absorption costing.

b. Prepare a contribution income statement for the quarter using variable costing.

c. What is the value of ending inventory under absorption costing?

d. What is the value of ending inventory under variable costing?

e. Reconcile the difference in ending inventory under absorption costing and variable costing.

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Beginning inventory (cases). Cases produced.. Cases sold. Sales price per case. Direct materials per case 9,000 8,700 $60 $8 Direct labor per case $9 Variable manufacturing overhead per case. $3 Total fixed manufacturing overhead.... $300.000 Variable selling and administrative cost per case $2 Fixed selling and administrative cost.... $48.000