Question
Colorado Business Tools, manufactures calculators. Costs incurred in making 9,880 calculators in February included $29,450 of fixed manufacturing overhead. The total absorption cost per calculator
Colorado Business Tools, manufactures calculators. Costs incurred in making 9,880 calculators in February included $29,450 of fixed manufacturing overhead. The total absorption cost per calculator was $10.70.
a. Calculate the variable cost per calculator. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b. The ending inventory of pocket calculators was 870 units higher at the end of the month than at the beginning of the month. By how much and in what direction (higher or lower) would operating income for the month of February be different under variable costing than under absorption costing? (Do not round intermediate calculations.)
c. Express the pocket calculator cost in a cost formula. (Do not round intermediate calculations. Round "Variable cost" to 2 decimal places.)
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