Adelphia Corporation, which uses throughput costing, just completed its first year of operations. Planned and actual production equaled 10,000 units, and sales totaled 9,600 units at $216 per unit. Cost data for the year are as follows:

Required:
1. Compute the company's total cost for the year assuming that variable manufacturing costs are driven by the number of units produced, and variable selling and administrative costs are driven by the number of units sold.
2. How much of this cost would be held in year-end inventory under

(a) absorption costing,

(b) variable costing, and

(c) throughput costing?

3. How much of the company's total cost for the year would be included as an expense on the period's income statement under

(a) absorption costing,

(b) variable costing, and

(c) throughput costing?

4. Prepare Adelphia's throughput-costing income statement.

Transcribed Image Text:

Direct material (per unit).. $36 Conversion cost: Direct labor.. 135,000 Variable manufacturing overhead. 195,000 Fixed manufacturing overhead.. 660,000 Selling and administrative costs: Variable (per unit) Fixed 24 354,000