Reference no: EM132794952

Question - The following information is available for Bright Company's product:

Sales price per unit P30

Variable manufacturing cost per unit of production P16

Total fixed cost per year P50,000

Variable administrative cost per unit of production P6

Total fixed selling and administrative expenses per year P30,000

Normal capacity is 12,500 units. During the year, 12,500 units were produced of which 2,500 were not sold. There was no inventory at the beginning of the year.

Required -

a. Determine the cost of inventory using variable costing.

b. Determine the cost of inventory using absorption costing.

c. Determine the total variable cost charged to expense for the year assuming variable costing is used.

d. Determine the total fixed cost charged to expense for the year assuming variable costing is used.

e. Determine the total fixed cost charged to expense for the year assuming absorption costing is used.