Assume that LeFiell Manufacturing management is considering using throughput costing for management decision making. (Refer to Exercise 15.34)
Exercise 15.34
LeFiell Manufacturing produces specialized electronics components. The following information is for the past three years of operations. LeFiell Manufacturing uses FIFO costing.

REQUIRED
A. Calculate the value of ending inventory and net income before taxes for each year under throughput costing. Assume direct materials are $50 per unit.
B. Explain the difference in net income before taxes under the variable costing and throughput costing approaches for each year.

2012 ota 2010 14,000 5,000 16,000 45,000 5,000 5,000 15,000 45,000 2011 Units sold Units produced Fixed production costs Variable production costs per unit Selling price per unit $500,000 $500,000 $500,000 $ 75 $75 $75 $ 200 $ 200200 Fixed selling and administrative expenses $100,000 $100,000 $100,000