Reference no: EM132478804

variable cost per unit:

direct materials $2.85

direct labor $1.92

variable overhead $1.60

variable selling $0.90

fixed cost per unit:

fixed overhead $180,000

selling and administrative $96,000

Point 1: During the year, borques produced 200,000 wooden pallets and sold 204,300 at $9 each. Borques has 8,200 pallets in beginning finished goods inventory; costs have not changed from last year to this year. An actual costing system is used for product costing

Question 1: What is the per-unit inventory cost that is acceptable for reporting on Borques's balance sheet at the end of the year?

1. How many units are in ending inventory?
2. What is the total cost of ending inventory?

Question 2: Calculate absorption-costing operating income.

Question 3: What would the per-unit inventory cost be under variable costing? Round your answer to the nearest cent.

1. Does this differ from the unit cost computed in Requirement 1?

Question 4: Calculate variable-costing operating income.

Question 5: Suppose that Borques Company had sold 196,700 pallets during the year. What would absorption-costing operating income have been?

1. What would variable-costing operating income?