Exercise 4-13 (Static) Inferring Costing Method; Unit Product Cost [LO4-1 Sierra Company Incurs the following costs to produce and sell its only product $ $ 10 5 Variable costs per unit: Direet materials Direct labor Variable manufacturing overhead Variable selling and administrative expenses Fixed costs per year. Fixed manufacturing overhead Fixed selling and administrative expenses $150,000 on During this year, 25,000 units were produced and 22,000 units were sold. The Finished Goods Inventory account at the end of this year shows a balance of $72,000 for the 3,000 unsold units. Required: 1-a. Calculate this year's ending balance in Finished Goods inventory two ways-using variable costing and using absorption costing 1-6. Does it appear that the company is using variable costing or absorption costing to assign costs to the 3,000 units in Its Finished Goods Inventory? 2. Assume that the company wishes to prepare this year's financial statements for its stockholders a. Is Finished Goods Inventory of $72.000 the correct amount to include on the balance sheet for external reporting purposes? b. What balance should be reported in the Finished Goods inventory account for external reporting purposes? Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Reg 2A Req 2B Calculate this year's ending balance in Finished Goods inventory two ways-using variable costing and using absorption costing. Ending Balance in Finished Goods Variable costing Absorption costing Reg 1B > Exercise 4-13 (Static) Inferring Costing Method; Unit Product Cost [LO4-1) Sierra Company Incurs the flowing costs to produce and sell its only product Variable conta per unit: Direet materials Direct labor $ 10 Variable manufacturing overhead S S Variable selling and administrative expenses Fixed costo per year: Fixed manufacturing overhead $150,000 Fixed selling and administrative S . expenses During this year, 25,000 units were produced and 22,000 units were sold. The Finished Goods Inventory account at the end of this year shows a balance of $72,000 for the 3,000 unsold units. Required: 1-a. Calculate this year's ending balance in Finished Goods inventory two ways-using variable costing and using absorption costing 1-b. Does it appear that the company is using variable costing or absorption costing to assign costs to the 3,000 units in its Finished Goods Inventory? 2. Assume that the company wishes to prepare this year's financial statements for its stockholders a. Is Finished Goods Inventory of $72.000 the correct amount to include on the balance sheet for external reporting purposes? b. What balance should be reported in the Finished Goods Inventory account for external reporting purposes? Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Reg 2A Req 2B Does it appear that the company is using variable costing or absorption costing to assign costs to the 3,000 units in its Finished Goods inventory? Absorption costing Variable costing Exercise 4-13 (Static) Inferring Costing Method: Unit Product Cost [LO4-1] Sierra Company Incurs the following costs to produce and sell its only product S Variable conta per unit: Direct materials Direct labor Variable manufacturing overhead S Variable selling and administrative expenses Fixed costa per year. Fixed manufacturing overhead Fixed selling and administrative expenses $150,000 $400,000 During this year, 25.000 units were produced and 22,000 units were sold. The Finished Goods Inventory account at the end of this year shows a balance of $72,000 for the 3.000 unsold units. Required: 1-a. Calculate this year's ending balance in Finished Goods inventory two ways-using variable costing and using absorption costing. 1-6. Does it appear that the company is using variable costing or absorption costing to assign costs to the 3,000 units in its Finished Goods Inventory? 2. Assume that the company wishes to prepare this year's financial statements forts stockholders a. Is Finished Goods Inventory of $72.000 the correct amount to include on the balance sheet for external reporting purposes? b. What balance should be reported in the Finished Goods Inventory account for external reporting purposes? Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Rea 2A Req 2B Assume that the company wishes to prepare this year's financial statements for its stockholders. Is Finished Goods inventory of $72,000 the correct amount to include on the balance sheet for external reporting purposes? Show less Yes, because variable costing is generally accepted for external reporting No, because variable costing is not generally accepted for external reporting. Yes, because absorption costing is generally accepted for external reporting No, because absorption costing is not generally accepted for external reporting Req1B Req 28 > Exercise 4-13 (Static) Inferring Costing Method: Unit Product Cost [LO4-1] Sierra Company Incurs the following costs to produce and sell its only product $ S Variable costa per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expenses Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $150,000 $400,000 During this year, 25,000 units were produced and 22,000 units were sold. The Finished Goods Inventory account at the end of this year shows a balance of $72,000 for the 3,000 unsold units. Required: 1-a. Calculate this year's ending balance in Finished Goods inventory two ways-using variable costing and using absorption costing. 1-b. Does It appear that the company is using variable costing or absorption costing to assign costs to the 3,000 units in its Finished Goods Inventory? 2. Assume that the company wishes to prepare this year's financial statements for its stockholders a. Is Finished Goods Inventory of $72.000 the correct amount to include on the balance sheet for external reporting purposes? b. What balance should be reported in the Finished Goods inventory account for external reporting purposes? Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Reg 2A Req 28 Assume that the company wishes to prepare this year's financial statements for its stockholders. What balance should be reported in the Finished Goods inventory account for external reporting purposes? Show less Finished goods inventory balance for external reporting purposes