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Altoona Valve Company's planned production for the year just ended was 20,000 units. This production level was achieved, and 21,000 units were sold. Other data
Altoona Valve Company's planned production for the year just ended was 20,000 units. This production level was achieved, and 21,000 units were sold. Other data follow: Direct Material used $300,000 Direct labor incurred $150,000 Fixed manufacturing overhead $210,000 Variable manufacturing overhead $100,000 Fixed selling and administrative expenses $175,000 Variable selling and administrative expenses $52,500 Finished goods inventory, January 1 2,000 units The cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at the beg. of the year. 1. What would be Altoona's finished-goods inventory cost on Dec 31 under the variable costing method? 2. Which costing method, absorption or variable costing, would show a higher operating income for the year? By what amount
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