Emerson Corporation just completed its first year of operations. Planned and actual production equaled 17,000 units,...

Emerson Corporation just completed its first year of operations. Planned and actual production equaled 17,000 units, and sales totaled 15,300 units at $107 per unit. Cost data for the year are as follows:


Direct material (per unit)	$	21
Conversion cost:
Direct labor		544,000
Variable manufacturing overhead		459,000
Fixed manufacturing overhead		544,000
Selling and administrative costs:
Variable (per unit)		23
Fixed		356,900

Required:

Compute the company’s total cost for the year assuming that variable manufacturing costs are driven by the number of units produced, and variable selling and administrative costs are driven by the number of units sold.
How much of this cost would be held in year-end inventory under (a) absorption costing and (b) variable costing?
How much of the company’s total cost for the year would be included as an expense on the period’s income statement under (a) absorption costing and (b) variable costing?

Solutions

Expert Solution

The answer for above problem is explained below.

Colby Messinger answered 1 year ago

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