Outback, Ltd., manufactures tactical LED flashlights in Melbourne, Australia. The firm uses an absorption-costing system for internal reporting purposes; however, the company is considering using variable costing. Data regarding planned and actual operations for 20x4 follow: Budgeted Costs Per Unit Total Actual Costs Direct material Direct labor 12.0 $1,702,800 $1,580,900 9.90 1,308,800 1,197,90 ariable manufacturing overhed 4.30 Foxed manufacturing overhead 4 ariable selling expenses Foxed selling expenses Variable administrative expenses Fixed administrative expenses 520,300 591,800 885,500 1,003,200 253,000 313,800 580,800 4.40 7.70 1,018,400 7.80 1,003,200 303,800 Total 551.30 $8,771,800 8,328,200 Planned Activity Actual Activity Sales in units Production in units Beginning finished-goods inventory in units 132,000 132,000 37,000 115,000 121,000 37,000 The budgeted per-unit cost figures were based on the company producing and selling 132,000 units in 20x4. Outback uses a predetermined overhead rate for applying manufacturing overhead to its product. A total manufacturing overhead rate of $8.70 per unit was employed for absorption costing purposes in 20x4. Any overapplied or underapplied manufacturing overhead is closed to the Cost of Goods Sold account at the end of the year. The 20x4 beginning finished-goods inventory for absorption costing purposes was valued at the 20x3 budgeted unit manufacturing cost, which was the same as the 20x4 budgeted unit manufacturing cost. There are no work-in-process inventories at either the beginning or the end of the year. The planned and actual unit selling price for 20x4 was $71.80 per unit. Outback, Ltd., manufactures tactical LED flashlights in Melbourne, Australia. The firm uses an absorption-costing system for internal reporting purposes; however, the company is considering using variable costing. Data regarding planned and actual operations for 20x4 follow: Budgeted Costs Per Unit Total Actual Costs Direct material Direct labor 12.0 $1,702,800 $1,580,900 9.90 1,308,800 1,197,90 ariable manufacturing overhed 4.30 Foxed manufacturing overhead 4 ariable selling expenses Foxed selling expenses Variable administrative expenses Fixed administrative expenses 520,300 591,800 885,500 1,003,200 253,000 313,800 580,800 4.40 7.70 1,018,400 7.80 1,003,200 303,800 Total 551.30 $8,771,800 8,328,200 Planned Activity Actual Activity Sales in units Production in units Beginning finished-goods inventory in units 132,000 132,000 37,000 115,000 121,000 37,000 The budgeted per-unit cost figures were based on the company producing and selling 132,000 units in 20x4. Outback uses a predetermined overhead rate for applying manufacturing overhead to its product. A total manufacturing overhead rate of $8.70 per unit was employed for absorption costing purposes in 20x4. Any overapplied or underapplied manufacturing overhead is closed to the Cost of Goods Sold account at the end of the year. The 20x4 beginning finished-goods inventory for absorption costing purposes was valued at the 20x3 budgeted unit manufacturing cost, which was the same as the 20x4 budgeted unit manufacturing cost. There are no work-in-process inventories at either the beginning or the end of the year. The planned and actual unit selling price for 20x4 was $71.80 per unit
