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Last year, Paper Inc produced 300,000 units and sold 280,000 units. Beginning inventory was zero. During the period the following costs were incurred: Variable manufacturing
Last year, Paper Inc produced 300,000 units and sold 280,000 units. Beginning inventory was zero. During the period the following costs were incurred: | |||||||
Variable manufacturing overhead, per unit | $ 35 | ||||||
Fixed manufacturing overhead, per unit | $ 20 | ||||||
Direct labor, per unit | $ 50 | ||||||
Direct materials, per unit | $ 25 |
1. Compute the number of units in ending inventory. You MUST use a formula/calculation in the highlighted cell below for full credit. (2 pts) | |||||||
units | |||||||
2. What is the per-unit product cost using absorption costing method. You MUST use a formula/calculation in the highlighted cell below for full credit. (2 pts) | |||||||
|
3. Compute the dollar amount of the value of ending inventory using the absorption costing method. You MUST use a formula/calculation in the highlighted cell below for full credit. (2 pts) | |||||||
4. What is the per-unit product cost using variable costing method? You MUST use a formula/calculation in the highlighted cell below for full credit. (2 pts) | |||||||
units |
5. Compute the dollar amount of the value of ending inventory using the variable costing method. You MUST use a formula/calculation in the highlighted cell below for full credit. (2 pts) | |||||||
6. If you were advising the accounting department on which method to use, which would you say? Explain your reasoning. (2 pts) |
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