Question

1.A company produces a single product. Variable production costs are $13.1 per unit and variable selling and administrative expenses are $4.1 per unit. Fixed manufacturing overhead totals $47,000 and fixed selling and administration expenses total $51,000. Assuming a beginning inventory of zero, production of 5,100 units and sales of 4,150 units, the dollar value of the ending inventory under variable costing would be: 1b. Farron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:   Selling price $112   Units in beginning inventory 0   Units produced 8,950   Units sold 8,550   Units in ending inventory 400   Variable costs per unit:     Direct materials $18     Direct labor $60     Variable manufacturing overhead $6     Variable selling and administrative $10   Fixed costs:     Fixed manufacturing overhead $134,250     Fixed selling and administrative $8,800 What is the net operating income for the month under absorption costing? 2. Farron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:   Selling price $104   Units in beginning inventory 0   Units produced 8,850   Units sold 8,450   Units in ending inventory 400   Variable costs per unit:     Direct materials $16     Direct labor $58     Variable manufacturing overhead $4     Variable selling and administrative $8   Fixed costs:     Fixed manufacturing overhead $132,750     Fixed selling and administrative $8,600 What is the net operating income for the month under variable costing? 3. Hatfield Corporation, which has only one product, has provided the following data concerning its most recent month of operations:   Selling price $195   Units in beginning inventory 0   Units produced 1,950   Units sold 830   Units in ending inventory 1,120   Variable costs per unit:   Direct materials $100   Direct labor $35   Variable manufacturing overhead $4   Variable selling and administrative $15   Fixed costs:   Fixed manufacturing overhead $25,350   Fixed selling and administrative $11,620 What is the total period cost for the month under the variable costing? 4.. A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:   Selling price $147   Units in beginning inventory 0   Units produced 2,860   Units sold 2,510   Units in ending inventory 350   Variable costs per unit:   Direct materials $49   Direct labor $23   Variable manufacturing overhead $11   Variable selling and administrative $16   Fixed costs:   Fixed manufacturing overhead $94,380   Fixed selling and administrative expenses $17,570 The total gross margin for the month under absorption costing is:

Answer 1

Note: All given questions are separate & independent. So as per rule I am answering first question including both parts of this first question.

Q1(A).

Dollar value of the ending inventory under variable costing = $12445

Explanation;

First of all let’s calculate units of ending inventory;

Ending inventory = Beginning inventory + Production – Sales

Ending inventory = 0 + 5100 units – 4150 units

Ending inventory = 950 units

Fixed costs and selling expenses are not considered under this method.

It is given in the question that variable production costs = $13.1 per unit

Thus, Dollar value of the ending inventory under variable costing (950 * $13.1) = $12445

Q1(b).

The net operating income for the month under absorption costing = $16850

Explanation;

Income Statement (Absorption Costing)
Sales (8550 * $112)	$957600
Less: Cost of goods sold;
Variable cost of goods sold (8550 * $84)	($718200)
Fixed cost of goods sold ($134250 * 8550 / 8950)	($128250)
Gross profit	$111150
Less: Selling & administrative expenses;
Variable selling & administrative expenses (8550 * $10)	($85500)
Fixed selling & administrative expenses	($8800)
Net operating income for the month	$16850