1. Under absorption costing, what is the inventory amount shown on the balance sheet at December 31, Year 1?

$155,600

$115,600

$98,500

$80,000

2. Under variable costing, what is the inventory amount shown on the balance sheet at December 31, Year 1?

$155,600

$115,600

$98,500

$80,000

3. Now suppose that all other details remain the same except that the company sold half of its production in year 1 for 150,000. What will be its income under absorption costing?

$54,450

$43,650

$52,200

$72,200

5. Now suppose that all other details remain the same except that the company sold the remaining inventory for $140,000 in year 2. What will be its income under variable costing? In year 2, the company had no manufacturing expenses and went out of business.

$44,450

$33,650

$82,200

$90,750

Queen Sales, Inc. has just completed its first year of operations. The company has not had any sales to date. Queen has incurred the following costs associated with its production as of December 31, Year 1 Direct materials Production labor Bookkeeper salary Factory utilities Office rent Factory supervisor salary Machine maintenance contract $45,000 35,000 28,000 18,500 12,000 9,600 7,500