Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 5 (9 points) Smitten Manufacturing Inc. began their first month of operations in April and manufactured 45,000 units with the following unit costs: Direct
Question 5 (9 points) Smitten Manufacturing Inc. began their first month of operations in April and manufactured 45,000 units with the following unit costs: Direct Materials Direct Labour Variable Manufacturing Overhead Variable Marketing $8.50 4.25 4.00 3.00 Total fixed factory overhead is $405,000 per month. During April, 42,000 units were sold at a price of $48, and fixed marketing expenses were $150,000. Required: 1. Calculate the cost of each unit for both absorption costing and variable costing. (4 marks) 2. How many units remain in ending inventory? (1 mark) 3. What is the total cost of ending inventory using absorption costing? (1 mark) 4. Which method, absorption costing or variable costing, would report the higher operating income, and by how much? Do not prepare an income statement
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started