Question
Carolina Corporation, which uses throughput costing, began operations at the start of the current year. Planned and actual production equaled 20,000 units, and sales totaled
Carolina Corporation, which uses throughput costing, began operations at the start of the current year. Planned and actual production equaled 20,000 units, and sales totaled 17,000 units at $95 per unit. Cost data for the year were as follows: Direct materials (per unit) $ 18 Conversion cost: Direct labor 225,000 Variable manufacturing overhead 335,000 Fixed manufacturing overhead 300,000 Selling and administrative costs (total) 443,000
Required:
A. Compute the company's total cost for the year.
B. How much of this cost would be held in year-end inventory under (1) absorption costing and (2) variable costing?
C. How much of the company's total cost for the year would appear on the period's income statement under (1) absorption costing and (2) variable costing?
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