Account Help

Exercise 8-22 Absorption and Variable Costing (LO 8-1, 8-4) Easton Pump Company's planned production for the year just ended was 18,600 units. This production level was achieved, and 21,600 units were sold. Other data follow: Direct material used Direct labor incurred Fixed manufacturing overhead Variable manufacturing overhead Fixed selling and administrative expenses Variable selling and administrative expenses Finished-goods inventory, January 1 $ 567,300 275, 280 401,760 189, 720 318,060 95,790 3,800 units The cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at the beginning or end of the year. Required: 1. What would be Easton Pump Company's finished-goods inventory cost on December 31 under the variable- costing method? (Do not round intermediate calculations.) 2-a. Which costing method, absorption or variable costing, would show a higher operating income for the year? 2-b. By what amount? (Do not round intermediate calculations.) 1. Finished-goods inventory cost 2-a. Higher operating income method 2-b. Difference in reported income