Question

In: Accounting

Fill in the blanks in the reconciliation between absorption and variable costing income completed by Burt...

Fill in the blanks in the reconciliation between absorption and variable costing income completed by Burt company:

Year 1

Year 2

Absorption Income

$283542

$686069

Less fixed costs in ending inventory

0

Y

Add fixed costs in beginning inventory

X

Z

Variable Costing Income

324741

?


In addition, the fixed overhead application rate is $4.05, 39674 units were produced and 16481 units were sold. Find the missing amounts:

Select one:

a. X $41199, Y $93932, Z $0

b. X $41199, Y $93932, Z $66748

c. X $41199, Y $160680, Z $66748

d. X $41199, Y $160680, Z $0

Solutions

Expert Solution

option a. is correct

Year 1:

X = 324741- 283542 = 41199

Year 2:

there are no opening inventory balance. Ending inventory units = 38674 - 16481

Fixed costs in ending inventory = 16481 * 4.05 = 93932 (value of Y)

Since there are no beginning inventory in year 2, Z = 0.

Variable costing income = 686069 + 93932 - 0 = 780001

ekkarill92 answered 2 years ago
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