Pinellas Pillow Company's planned production for the year just ended was 21,400 units. This level of production was achieved, but only 18,000 units were sold. Other data follows:

direct material used	ps	624,880
Direct labor incurred		327,420
Fixed manufacturing costs		455,820
Variable manufacturing overhead		233,260
Fixed selling and administrative expenses		357,380
Variable selling and administrative expenses		97,370
Finished Goods Inventory, January 1		None

There were no work-in-process inventories at the beginning or end of the year.

Required:

What would be the cost of Pinellas Pillow Company's finished goods inventory on December 31 under the variable costing method?

Which costing method, absorption or variable costing, would show the highest operating income for the year? For what amount?

Answer rating: 100% (QA)

SOLUTION To calculate the cost of Pinellas Pillow Companys finished goods inventory on December 31 under the variable costing method we need to calcul... View the full answer