C CHAPTER 3 1. CC.ABS_VS_VAR_COST_INV 2. CC.ABS_VS_VAR_COST_I... 3. CC.BASICS_OF_COST_BE... 4. CC.SEMI VAR_COST_BEH... 5. CC.MIXED_COSTS_INTO_... 6. TMM.03.04 7. TMM.03.02 eBook Variable-Costing and Absorption-Costing Income Borques Company produces and sells wooden pallets that are used for moving and stacking materials. The operating costs for the past year were as follows: Variable costs per unit: Direct materials $ 2.85 Direct labor $ 1.92 Variable overhead $ 1.60 Variable selling $ 0.90 Fixed costs per year: Fixed overhead Selling and administrative $180,000 $ 96,000 During the year, Borques produced 200,000 wooden pallets and sold 204,300 at $9 each. Borques had 8,200 pallets in beginning finished goods inventory; costs have not changed from last year to this year. An actual costing system is used for product costing. Required: 1. What is the per-unit inventory cost that is acceptable for reporting on Borques's balance sheet at the end of the year? 8. TMM.03.01 9. MC.03.01 10. MC.03.02 11. MC.03.03 12. MC.03.04 13. MC.03.08 How many units are in ending inventory? units What is the total cost of ending inventory? 14. MC.03.13 2. Calculate absorption-costing operating income. 15. MC.03.14 16. BE.03.16A 3. What would the per-unit inventory cost be under variable costing? Round your answer to the nearest cent. 17. BE.03.21A 18. BE.03.23A 19. BE.03.24A Does this differ from the unit cost computed in Requirement 1? Yes 4. Calculate variable-costing operating income. 20. EX.03.34 5. Suppose that Borques Company had sold 196,700 pallets during the year. What would absorption-costing operating income have been? 21. EX.03.54 22. EX.03.52 What would variable-costing operating income? 23. EX.03.53 24. EX.03.40 Feedback 25. PR.03.66 Check My Work 1. Determine per-unit cost under absorption costing. You will need to calculate a fixed overhead rate. Next, determine Ending inventory: Beginning inventory + Units produced - Units sold. Apply the unit cost to the number of units in ending inventory to determine the cost of ending inventory. 2. Prepare an Income Statement to determine operating income under absorption costing: Sales (Sell price x units sold) Less: Cost of goods sold (Absorption unit cost x units sold) Less: = Gross margin Variable selling expense (Variable selling cost x units sold) Fiver callinn avnanca Progress: 25/25 items Check My Work Assignment Score: 82.72% Previous All work saved. Save and Exit Submit Assignment for Grading