Review Samsung’s income statement in Appendix A for the year ending December, 31 2017, and identify its net income for 2017.

1. Review Samsung’s balance sheet data in Appendix A as of December 31, 2017, and December 31, 2016. What amounts (in ₩ millions) does Samsung report for inventory at each of these balance sheet dates?

2. Assume Samsung uses absorption costing for financial reporting and its fixed overhead costs equal 10% of the total reported inventory cost at each of these two balance sheet dates. Compute Samsung’s 2017 net income under variable costing. Refer to Exhibit 6.11.