Spicer Company produces and sells wooden pallets that are used for moving and stacking materials. The operating

Question:

Spicer Company produces and sells wooden pallets that are used for moving and stacking materials. The operating costs for the past year were as follows:
Variable costs per unit:
Direct materials .............. $ 2.45
Direct labor ...............2.10
Variable overhead ............0.25
Variable selling ..............0.30
Fixed costs per year:
Fixed overhead .............180,000
Selling and administrative ......... 56,000
During the year, Spicer produced 200,000 wooden pallets and sold 208,000 at $ 9 each. Spicer had 11,300 pallets in beginning finished goods inventory; costs have not changed from last year to this year. An actual costing system is used for product costing.
Required
1. What is the per-unit inventory cost that will be reported on Spicer’s at the end of the year? How many units are in ? What is the total cost of ?
2. Calculate absorption-costing operating income.
3. What would the per-unit inventory cost be under variable costing? Does this differ from the unit cost computed in Requirement 1? Why or why not?
4. Calculate variable-costing operating income.
5. Suppose that Spicer Company had sold 196,700 pallets during the year. What would absorption-costing operating income have been? Variable-costing operating income? Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...