Altoona Valve Company’s planned production for the year just ended was 18,300 units. This production level...

Altoona Valve Company’s planned production for the year just ended was 18,300 units. This production level was achieved, and 20,500 units were sold. Other data follow:


Direct material used	$	549,000
Direct labor incurred		287,310
Fixed manufacturing overhead		373,320
Variable manufacturing overhead		177,510
Fixed selling and administrative expenses		307,440
Variable selling and administrative expenses		92,415
Finished-goods inventory, January 1		3,100	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 Altoona Valve Company’s finished-goods inventory cost on December 31 under the variable-costing method? (Do not round your intermediate calculations.)
	Finished-goods inventory cost

2-a.	Which costing method, absorption or variable costing, would show a higher operating income for the year?


	Variable costing Absorption costing

2-b.	By what amount? (Do not round your intermediate calculations.)

Difference in reported income

Expert Solution

ekkarill92 answered 2 years ago

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