Using variable and absorption costing
The following production data came from the records of LeShaq Athletic Enterprises for the year ended December 31, 2011:
Materials
$480,000.00
Labor
260,000
Variable factory overhead
$44,000
Fixed factory overhead
36,800
During the year, 40,000 units were manufactured but only 35,000 units were sold. Determine the effect on inventory valuation by computing the following:
1. Total inventorial costs and the cost of the 35,000 units sold and of the 5,000 units in the ending inventory, using variable costing.
2. Total inventorial costs and the cost of the 35,000 units sold and of the 5,000 units in the ending inventory, using absorption costing.
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