Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Butler, Inc. just finished its second year of operations. In the first year it produced 1,000 units and sold 400. The second year resulted in
Butler, Inc. just finished its second year of operations. In the first year it produced 1,000 units and sold 400. The second year resulted in the same production level, but sales were 1,200 units. The variable costing income statements for both years are shown below: Year 1 Year 2 Sales $40,000 $120,000 Variable cost of goods sold $22,000 $66,000 Variable selling and administration _800 22.800 2.400 68.400 Contribution margin 17,200 51,600 Fixed manufacturing overhead 20,000 20,000 Fixed selling and administration 15,000 35,000 15.000 35.000 Operating income $(17,800 $ 16,600 The ending inventory for year 2 using absorption costing would be: A. $34,000 B. $30,000 C. $22,000 D. $51,000
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