Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sierra Company incurs the following costs to produce and sell its only product. During this year, 30,500 units were produced and 24,750 units were sold.

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Sierra Company incurs the following costs to produce and sell its only product. During this year, 30,500 units were produced and 24,750 units were sold. The Finished Goods inventory account at the end of this year shows a balance of $126,500 for the 5,750 unsold units. Required: : 1.a. Calculate this year's ending balance in Finished Goods inventory two ways-using variable costing and using absorption costing. 1.b. Does it appear that the company is using variable costing or absorption costing to assign costs to the 5,750 units in its Finished Goods inventory? 2. Assume that the company wishes to prepare this year's financial statements for its stockholders. a. Is Finished Goods inventory of $126,500 the correct amount to include on the balance sheet for external reporting purposes? b. What balance should be reported in the Finished Goods inventory account for extemal reporting purposes? Complete this question by entering your answers in the tabs below. Caiculate this year's ending ba ance in Finished Goods inventory two ways-using variable costing and using absorption costing. (Round intermedate calculation to the nearest dollar aimount.) Does it appear that the company is using variable costing or absorption costing to assign costs to the 5,750 units in its Finished Goods inventory? Assume that the company wishes to prepare this year's financial statements for its stockholders. Is Finished Goods inventory of $126,500 the correct amount to include on the balance sheet for external reporting purposes? Complete this question by entering your answers in the tabs below. Assume that the company wishes to prepare this year's financial statements for its stockholders. What balance should be reported in the Finished Goods inventory account for external reporting purposes? Finithad goods irwentory baiance for extemal reporting purposes

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Practical Approach

Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton, Valerie Warren

3rd Canadian edition

1-119-40285-5, 111940276X, 978-1119566007

More Books

Students also viewed these Accounting questions