Question
Unit Costs, Inventory Valuation, Variable and Absorption Costing Snyder Company produced 80,300 units during its first year of operations and sold 77,000 at $21.51 per
Unit Costs, Inventory Valuation, Variable and Absorption Costing
Snyder Company produced 80,300 units during its first year of operations and sold 77,000 at $21.51 per unit. The company chose practical activityat 80,300 unitsto compute its predetermined overhead rate. Manufacturing costs are as follows:
Direct materials | $486,618 |
Direct labor | 80,300 |
Expected and actual variable overhead | 300,322 |
Expected and actual fixed overhead | 448,877 |
Required:
If required, round unit cost answers to the nearest cent.
1. Calculate the unit cost and the cost of finished goods inventory under absorption costing.
Unit Cost | $fill in the blank 1 |
Cost of finished goods inventory | $fill in the blank 2 |
2. Calculate the unit cost and the cost of finished goods inventory under variable costing.
Unit Cost | $fill in the blank 3 |
Cost of finished goods inventory | $fill in the blank 4 |
3. What is the dollar amount that would be used to report the cost of finished goods inventory to external parties? $fill in the blank 5
Why?
Because absorption costing is required for external reportingBecause absorption costing is a more accurate methodBecause absorption costing always results in higher net incomeBecause absorption costing is required for external reporting
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