In: Accounting
Question 2 |
The income statement for Tiger Co. for 2015 is summarized as follows: |
Sales (200,000 units) $3,000,000
Variable costs 1,000,000
Contribution margin 2,000,000
Fixed costs (80% manufacturing related) 500,000
Operating income $1,500,000
Variable costs include: |
Direct materials $1.50/unit $300,000 |
Direct labour $2.00/unit $400,000 |
Variable MOH $1.25/unit $250,000 |
Variable selling & admin $0.25/unit $50,000 |
There were 0 units in beginning inventory, and 50,000 units in ending inventory. |
Required - |
a) Calculate the total cost of ending inventory for 2015 under the variable costing method. |
b) Calculate the total cost of ending inventory for 2015 under the absorption costing method. |
c) Create an absorption costing income statement for Tiger Co for 2015. |
Question 2 |
The income statement for Tiger Co. for 2015 is summarized as follows |
Sales (200,000 units) $3,000,000
Variable costs 1,000,000