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Exercise 8-22 Absorption and Variable Costing (LO 8-1, 8-4) Easton Pump Company’s planned production for the...

Exercise 8-22 Absorption and Variable Costing (LO 8-1, 8-4) Easton Pump Company’s planned production for the year just ended was 18,200 units. This production level was achieved, and 21,600 units were sold. Other data follow: Direct material used $ 544,180 Direct labor incurred 293,020 Fixed manufacturing overhead 396,760 Variable manufacturing overhead 167,440 Fixed selling and administrative expenses 322,140 Variable selling and administrative expenses 101,010 Finished-goods inventory, January 1 4,000 units The cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at the beginning or end of the year. Required: 1. What would be Easton Pump Company’s finished-goods inventory cost on December 31 under the variable-costing method? (Do not round intermediate calculations.) 2-a. Which costing method, absorption or variable costing, would show a higher operating income for the year? 2-b. By what amount? (Do not round intermediate calculations.)

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ekkarill92 answered 2 years ago
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