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Horizon Manufacturing provides you with the following information for the most recent month of operations: Units in beginning inventory 0 Units produced 3,000 Units
Horizon Manufacturing provides you with the following information for the most recent month of operations: Units in beginning inventory 0 Units produced 3,000 Units sold 2,500 Selling price $150 per unit Fixed Manufacturing cost $95,000 Fixed Selling and Administrative cost $5,000 Variable manufacturing costs Variable selling and administrative costs $8 per unit $75 per unit Required: a. What is Horizon's reported income and cost of ending inventory under variable costing? b. What is Horizon's reported income and cost of ending inventory under absorption costing? Assume Horizon allocates cost using units produced. c. Reconcile the difference between Horizon's income under variable costing and absorption costing.
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