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Chapter 21 Homework (Application) eBook Show Me How Office 365 Inventory valuation under absorption costing and variable costing At the end of the first year of operations, 24,400 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows: Direct materials $31 Direct labor 22 Fixed factory overhead 23 Variable factory overhead 12 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Open spreadsheet Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept. a. Cost of the finished goods inventory under the absorption costing: $ b. Cost of the finished goods inventory under the variable costing: Check My Work Previous Next Assignment Score: 32.04% Save and Exit Submit Assignment for GradingChapter 21 Homework (Application) eBook Show Me How Office 365 Income statements under absorption and variable costing ? Gallatin County Motors Inc. assembles and sells snowmobile engines. The company began operations on July 1 and operated at 100% of capacity during the first month. The following data summarize the results for July: Sales (3,000 units $2,040,000 Production costs (3,000 units): Direct materials $877,200 Direct labor 377,100 Variable factory overhead 61,500 Fixed factory overhead 96,600 1,412,400 Selling and administrative expenses: Variable selling and administrative expenses $43,800 Fixed selling and administrative expenses 18,400 62,200 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. X Open spreadsheet a. Prepare an income statement according to the absorption costing concept. Gallatin County Motors Inc. Absorption Costing Income Statement For the Month Ended July 31 b. Prepare an income statement according to the variable costing concept. Gallatin County Motors Inc. Variable Costing Income Statement For the Month Ended July 31 Check My Work Previous Next Assignment Score: 32.04% Save and Exit Submit Assignment for GradingChapter 21 Homework (Application) eBook Show Me How Office 365 Open spreadsheet a. Prepare an income statement according to the absorption costing concept. Gallatin County Motors Inc. Absorption Costing Income Statement For the Month Ended July 3: . Prepare an income statement according to the variable costing concept. Gallatin County Motors Inc. Variable Costing Income Statement For the Month Ended July 31 Fixed costs: $ c. What is the reason for the difference in the amount of Operating income reported in (a) and (b)? Under the method, the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Under , all of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. Thus, when inventory increases, the income statement will have a higher Operating income than will the variable costing income statement. Check My Work Previous Next Assignment Score: 32.04% Save and Exit Submit Assignment for GradingChapter 21 Homework (Application) eBook Show Me How Office 365 Income statements under absorption costing and variable costing ? Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (203,000 units) during the first month, creating an ending inventory of 15,000 units. During February, the company produced 188,000 units during the month but sold 203,000 units at $540 per unit. The February manufacturing costs and selling and administrative expenses were as follows: Number of Unit Cost Total Units Cost Manufacturing costs in February 1 beginning inventory: Variable 15,000 $270.00 $4,050,000 Fixed 15,000 20.0 300,000 Total $290.00 $4,350,000 Manufacturing costs in February: Variable 188,000 $270.00 $50,760,000 Fixed 188,000 23.10 4,342,800 Total $293.10 $55,102,800 Selling and administrative expenses in February: Variable 203,000 15.40 $3,126,200 Fixed 203,000 1.00 203,000 Total 16.40 $3,329,200 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet a. Prepare an income statement according to the absorption costing concept for February. Enter all amounts as positive numbers. Fresno Industries Inc. Absorption Costing Income Statement For the Month Ended February 28 Cost of goods sold: Check My Work Previous Assignment Score: 32.04% Save and Exit Submit Assignment for GradingChapter 21 Homework (Application) 1 eBook Show Me How Office 365 a. Prepare an income statement according to the absorption costing concept for February. Enter all amounts as positive numbers. Fresno Industries Inc. Absorption Costing Income Statement For the Month Ended February 28 Cost of goods sold: b. Prepare an income statement according to the variable costing concept for February. Enter all amounts as positive numbers. Fresno Industries Inc. Variable Costing Income Statement For the Month Ended February 28 Fixed costs: c. What is the reason for the difference in the amount of Operating income reported in (a) and (b)? Under the method, the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Under , all of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. Thus, when inventory decreases, the income statement will have a lower Operating income. Check My Work Previous Assignment Score: 32.04% Save and Exit Submit Assignment for Grading