Refer to Exercise E21- 15. VitaSport produced 20,000 cases of powdered drink mix and sold 17,000 cases

Question:

Refer to Exercise E21- 15.

VitaSport produced 20,000 cases of powdered drink mix and sold 17,000 cases in April 2014. The sale price was $ 22, variable costs were $ 14 per case ($ 10 manufacturing and $ 4 selling and administrative), and total fixed costs were $ 55,000 ($ 40,000 manufacturing overhead and $ 15,000 selling and administrative). The company had no beginning Finished Goods Inventory.


Requirements

1. Prepare the April income statement using absorption costing.

2. Determine the product cost per unit and the total cost of the 3,000 cases in Finished Goods Inventory as of April 30.

3. Is the April 30 balance in Finished Goods Inventory higher or lower than variable costing? Explain why.


Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Horngrens Financial and Managerial Accounting

ISBN: 978-0133255584

4th Edition

Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura

Question Posted: