Outback, Ltd., manufactures tactical LED flashlights in Melbourne, Australia. The firm uses an absorption-costing system for...

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Outback, Ltd., manufactures tactical LED flashlights in Melbourne, Australia. The firm uses an absorption-costing system for internal reporting purposes; however, the company is considering using variable costing. Data regarding planned and actual operations for 20x4 follow: Budgeted Costs Per Unit Total $12.90 $1,702,800 1,308,800 587,600 580,800 1,016,400 1,003,200 290.400 303.600 Actual Costs $1,580,900 1,197.900 520,300 591,800 885,500 1,003,200 253,000 313,800 Direct material Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Variable administrative expenses Fixed administrative expenses 9.90 4.30 4.40 7.70 7.60 2.20 2.30 Total $51.30 $6,771,600 $8.326,200 Planned Activity Actual Activity 132,000 132,000 37,000 Sales in units 115,000 121,000 37,000 Production in units Beginning finished-goods inventory in units The budgeted per-unit cost figures were based on the company producing and selling 132,000 units in 20x4. Outback uses a predetermined overhead rate for applying manufacturing overhead to its product. A total manufacturing overhead rate of $8.70 per unit was employed for absorption costing purposes in 20x4. Any overapplied or underapplied manufacturing overhead is closed to the Cost of Goods Sold account at the end of the year. The 20x4 beginning finished-goods inventory for absorption costing purposes was valued at the 20x3 budgeted unit manufacturing cost, which was the same as the 20x4 budgeted unit manufacturing cost. There are no work-in-process inventories at either the beginning or the end of the year. The planned and actual unit selling price for 20x4 was $71.80 per unit. 1. Compute the value of Outback's 20x4 ending finished-goods inventory under absorption costing. (Do not round intermediate calculations.) Value of finished-goods inventory 2. Compute the value of Outback's 20x4 ending finished-goods inventory under variable costing. (Do not round intermediate calculations.) Value of finished-goods inventory 3. Compute the difference between Outback's 20x4 reported operating income calculated under absorption costing and calculated under variable costing. (Do not round intermediate calculations.) Difference in reported income Outback, Ltd., manufactures tactical LED flashlights in Melbourne, Australia. The firm uses an absorption-costing system for internal reporting purposes; however, the company is considering using variable costing. Data regarding planned and actual operations for 20x4 follow: Budgeted Costs Per Unit Total $12.90 $1,702,800 1,308,800 587,600 580,800 1,016,400 1,003,200 290.400 303.600 Actual Costs $1,580,900 1,197.900 520,300 591,800 885,500 1,003,200 253,000 313,800 Direct material Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Variable administrative expenses Fixed administrative expenses 9.90 4.30 4.40 7.70 7.60 2.20 2.30 Total $51.30 $6,771,600 $8.326,200 Planned Activity Actual Activity 132,000 132,000 37,000 Sales in units 115,000 121,000 37,000 Production in units Beginning finished-goods inventory in units The budgeted per-unit cost figures were based on the company producing and selling 132,000 units in 20x4. Outback uses a predetermined overhead rate for applying manufacturing overhead to its product. A total manufacturing overhead rate of $8.70 per unit was employed for absorption costing purposes in 20x4. Any overapplied or underapplied manufacturing overhead is closed to the Cost of Goods Sold account at the end of the year. The 20x4 beginning finished-goods inventory for absorption costing purposes was valued at the 20x3 budgeted unit manufacturing cost, which was the same as the 20x4 budgeted unit manufacturing cost. There are no work-in-process inventories at either the beginning or the end of the year. The planned and actual unit selling price for 20x4 was $71.80 per unit. 1. Compute the value of Outback's 20x4 ending finished-goods inventory under absorption costing. (Do not round intermediate calculations.) Value of finished-goods inventory 2. Compute the value of Outback's 20x4 ending finished-goods inventory under variable costing. (Do not round intermediate calculations.) Value of finished-goods inventory 3. Compute the difference between Outback's 20x4 reported operating income calculated under absorption costing and calculated under variable costing. (Do not round intermediate calculations.) Difference in reported income

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1 Closing inventory actual Beginning Inventory Units produced units sold Closing Inventory 370... View the full answer