Williamson Inc. manufactures digital voice recorders. During 2022, total costs associated with manufacturing 52,000 of the new EZ 9900 model (introduced this year) were as follows:

Required:
a. Calculate the cost per recorder under both variable costing and absorption costing.
b. If 6,800 of these recorders were in finished goods inventory at the end of 2022, by how much and in what direction (higher or lower) would 2022 cost of goods sold and operating income be different under variable costing than under absorption costing?
c. Express the digital voice recorder cost in a cost formula. What does this formula suggest the total cost of making an additional 825 recorders would be?

Transcribed Image Text:

Raw materials.. Direct labor.... Variable manufacturing overhead. Fixed manufacturing overhead... $447,200 $738,400 187,200 176,800