The information that follows pertains to consumer products

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The information that follows pertains to Consumer Products for the year ended December 31, 20X6.                                           

  

Inventory, 1/1/X6

  
  

24,000 units

  
  

Units manufactured

  
  

80,000

  
  

Units sold

  
  

82,000

  
  

Inventory, 12/31/X6

  
  

? units

  
  

Manufacturing costs:

  
  

Direct materials

  
  

$3 per unit

  
  

Direct labor

  
  

$5 per unit

  
  

Variable factory   overhead

 
  

$9 per unit

  
 

Fixed factory overhead   

  
  

$280,000

  
  

Selling &   administrative expenses:

  
  

Variable

  
  

$2 per unit

  
  

Fixed

  
  

$136,000

  

The unit selling price is $26. Assume that costs have been stable in recent years.

Instructions:

a.Compute the number of units in the ending inventory.

b.Calculate the cost of a unit assuming use of:

1.Direct costing.

2.Absorption costing.

c.Prepare an income statement for the year ended December 31, 20X6, by using direct costing.

d.Prepare an income statement for the year ended December 31, 20X6, by using absorption costing.

Reference no: EM13584482

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