Easton Pump Company’s planned production for the year just ended was 18,600 units. This production level...

Easton Pump Company’s planned production for the year just ended was 18,600 units. This production level was achieved, and 21,500 units were sold. Other data follow:


Direct material used	$	569,160
Direct labor incurred		262,260
Fixed manufacturing overhead		405,480
Variable manufacturing overhead		176,700
Fixed selling and administrative expenses		327,360
Variable selling and administrative expenses		97,650
Finished-goods inventory, January 1		3,900	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.)

Solutions

Expert Solution

ekkarill92 answered 9 months ago

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