Langdon Company produced 9,000 units during the past year, but only 8,200 of the units were sold.
Question:
Langdon Company produced 9,000 units during the past year, but only 8,200 of the units were sold. The following additional information is also available.
Direct materials used $79,000 Direct labor incurred $30,000 Variable manufacturing overhead $21,500 Fixed manufacturing overhead $45,000 Fixed selling and administrative expenses $70,000 Variable selling and administrative expenses $10,000 There was no work in process inventory at the beginning of the year, nor did Langdon have any beginning finished goods inventory.
Instructions
(a) What would be Langdon Company’s fi nished goods inventory cost on December 31 under variable costing?
(b) Which costing method, absorption or variable costing, would show a higher net income for the year? By what amount?
AppendixLO1
Step by Step Answer:
Accounting Tools For Business Decision Making
ISBN: 9781118771112
5th Edition
Authors: Kimmel, Wetlands, Kieso