Question
ReplenAde produced 15,000 cases of powdered drink mix and sold 12.000 cases in April 2018. The sales price was $26, variable costs were $12 per
ReplenAde produced 15,000 cases of powdered drink mix and sold 12.000 cases in April 2018. The sales price was $26, variable costs were $12 per case (59 manufacturing and 53 selling and administrative), and total fixed costs were $70,000 ($45,000 manufacturing overhead and $25,000 selling and administrative). The company had no beginning Finished Goods Inventory. The company had the following results using (Click the icon to view the data using variable costing) variable costing Read the caQuirements Month Ended April 30, 2018 Operating Income Choose from any list or enter any number in the input fields and then continue to the next question Reference Variable Costing S Total product cost per unit 9.00 Cost of Finished Goods Inventory as of April 30, 2018 $ 27.000 Print Done Requirement 2. Determine the product cost per unit and the total cost of the 3,000 cases in Finished Goods Inventory as of April 30 The cost per unit is and the total cost of the 3.000 cases in Finished Goods Inventory as of Apr 30 is Requirement 3. Is the April 30 balance in Finished Goods Inventory higher or lower than variable costing? Explain why OA. The finished goods inventory under the absorption costing method is lower than under the variable costing method. The primary reason for this is that with variable costing, some manufacturing Reed custs are still in Finished Goods Inventory on the balance sheet and have not been expensed OB. The finished goods inventory under the absorption costing method is higher than under the variable costing method. The primary reason for this is that the unit cost is higher under absorption costing because fixed manufacturing costs are absorbed by the entire production run and not expensed as a period cost, as they would be under the variable costing method OC. The finished goods inventory under the absorption costing method is lower than under the variable costing method. The primary reason for this is that the unit cost is higher under variable costing because fixed manufacturing costs are considered a product cost and are not expensed as a period cost, as they would be under the absorption costing method OD. The finished goods inventory under the absorption costing method is higher than under the variable costing method. The primary reason for this is that the absorption costing method considers selling and administrative costs to be product costs, and the variable costing method considers them period costs old 12,000 cases in April 2018. The sales price was $26, variable costs were $12 per case and $25,000 selling and administrative). The company had no beginning Finished Goods i Requirements -X 1. Prepare the April income statement using absorption costing. 2. Determine the product cost per unit and the total cost of the 3,000 cases in Finished Goods Inventory as of April 30. 3. Is the April 30 balance in Finished Goods Inventory higher or lower than variable costing? Explain why. Print Done elds and then continue to the next
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