The Garrard Corporation began business on January 1 20X0 to
The Garrard Corporation began business on January 1, 20X0, to produce and sell a single product. Reported operating income figures under both absorption and variable costing for the first 4 years of operation are as follows:

Standard production costs per unit, sales prices, application (absorption) rates, and expected volume levels were the same in each year. There were no flexible-budget variances for any type of cost. All nonmanufacturing expenses were fixed, and there were no nonmanufacturing cost variances in any year.
1. In what year(s) did “units produced” equal “units sold”?
2. In what year(s) did “units produced” exceed “units sold”?
3. What is the dollar amount of the December 31, 20X3, finished-goods inventory? (Give absorption-costing value.)
4. What is the difference between “units produced” and “units sold” in 20X3 if you know that the absorption-costing fixed-manufacturing overhead application rate is $4 per unit? (Give answerin units.)
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