Question
Peterson Corporation produces a single product. The company had no beginning inventory and they produced 70,000 units during 2021 and sold 60,000 units. The operating
Peterson Corporation produces a single product. The company had no beginning inventory and they produced 70,000 units during 2021 and sold 60,000 units. The operating data for 2021 follow:
Sales $1,380,000
Manufacturing costs:
Direct Materials 294,000
Direct Labor 182,000
Variable manufacturing overhead 273,000
Fixed manusfacturing overhead 150,500
Selling & Administrative expenses:
Fixed 140,000
Variable 258,000
Required:
A). Calculate the value of the ending finished goods inventory under variable costing.
B). Calculate the amount of net income under variable costing.
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