Question: Based on the data presented in the Spreadsheet below (Full Variable tab), complete the calculations listed below. Calculate the value of ending inventory under full

Based on the data presented in the Spreadsheet below (Full Variable tab), complete the calculations listed below.

  • Calculate the value of ending inventory under full or absorption costing.
  • Calculate the value of ending inventory under variable costing.

Discuss the results, and comment on which method you think is more helpful to managers and why.

Cookie Business
Productions Costs:
Direct material $ 0.60
Direct labor $ 1.00
Variable manufacturing overhead $ 0.40
Total variable manufacturing costs per unit $ 2.00
Fixed manufacturing overhead per year $ 139,000.00
In addition, the company has fixed selling and administrative costs:
Fixed selling costs per year $ 50,000.00
Fixed administrative costs per year $ 65,000.00
Selling price per cookie $ 3.75
Number of cookies produced 2,780,000
Number of cookies sold 2,600,000
Full (absorption) costing :
Full cost per unit
Ending Inventory Full (absorption) costing
Variable costing :
Variable cost per unit
Ending Inventory Full (absorption) costing

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