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Variable Costing, Absorption Costing During its first year of operations, Snobegon, Inc. ( located in Lake Snobegon, Minnesota ) , produced 4 0 , 0
Variable Costing, Absorption Costing
During its first year of operations, Snobegon, Inc. located in Lake Snobegon, Minnesota produced plastic snow scoops. Snow scoops are oversized shoveltype scoops that are used to push snow away. Unit sales were scoops. Fixed overhead was applied at $ per unit produced. Fixed overhead was underapplied by $ This fixed overhead variance was closed to Cost of Goods Sold. There was no variable overhead variance. The results of the year's operations are as follows on an absorptioncosting basis:
Sales units @ $ $
Less: Cost of goods sold
Gross margin $
Less: Selling and administrative expenses all fixed
Operating income $
Required:
Question Content Area
Calculate the cost of the firm's ending inventory under absorption costing. Round unit cost to five decimal places. Round your final answer to the nearest dollar.
$fill in the blank cfadd
Question Content Area
What is the cost of the ending inventory under variable costing? Round unit cost to five decimal places. Round your final answer to the nearest dollar.
$fill in the blank dfffd
Question Content Area
Prepare a variablecosting income statement. Round the unit cost to five decimal places, when required. Round your final answers to the nearest dollar. Use the rounded values in subsequent computations.
Snobegon, Inc.
VariableCosting Income Statement
For the First Year of Operations
$ Select
Select
Contribution margin $fill in the blank afcb
Less:
Select
Select
Operating income $fill in the blank afcb
Question Content Area
What is the difference between the two income figures?
$fill in the blank cfeafed
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