Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Saved Easton Pump Company's planned production for the year just ended was 19,000 units. This production level was achieved, and 21,200 units were sold. Other
Saved Easton Pump Company's planned production for the year just ended was 19,000 units. This production level was achieved, and 21,200 units were sold. Other data follow: Direct material used Direct labor incurred Fixed manufacturing overhead Variable manufacturing overhead Fixed selling and administrative expenses Variable selling and administrative expenses Finished-goods inventory, January 1 $571,900 285,000 408,500 186,200 330, 600 107,350 3,000 units The cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at the beginning or end of the year. Required: 1. What would be Easton Pump Company's finished-goods inventory cost on December 31 under the variable-costing method? (Do not round intermediate calculations.) 2-a. Which costing method, absorption or variable costing, would show a higher operating income for the year? 2-b. By what amount? (Do not round intermediate calculations.) 1. Finished-goods inventory cost 2-a. Higher operating income method 2-b. Difference in reported income
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