Question
Dave Kulkarni makes gas stoves. Each unit of gas stove sells for $3,000. For each gas stove, the costs of materials total $400, labor costs
Dave Kulkarni makes gas stoves. Each unit of gas stove sells for $3,000. For each gas stove, the costs of materials total $400, labor costs equal $700 and the fixed manufacutring cost per unit amounts to $1,000.Dave also incurs $130 per unit of variable selling expenses per stove, $50 per unit of variable manufacturing overhead costs and $200,000 of fixed selling costs. For the current year, Dave made 1,500 stoves and sold 1,400 stoves. 1) Under variable costing, the inventoriable cost per unit for each of the 100 stoves put into inventory = $ 2) Under absorption costing, the inventoriable cost per unit for each of the 100 stoves put into inventory = $ 3) Suppose Dave began the year with zero inventories of stoves. What is the difference between the incomes that would be reported under absorpotion costing and variable costing? The difference equals $
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