Calculate the value of the ending finished goods inventory

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Reference no: EM133087849

Question - Sierra Grand Corporation produces a single product, the Duffle bag. The company had no beginning inventory and they produced 60,000 units during 2021 and sold 55,000 units. The operating data for 2021 follow:

Sales $1,925,000

Manufacturing costs:

Direct Materials $660,000

Direct labor 165,000

Variable manufacturing overhead 249,000

Fixed manufacturing overhead 300,000

Selling & Administrative expenses:

Fixed $240,000

Variable 192,500

Required -

A) Calculate the value of the ending finished goods inventory under variable costing?

B) Calculate the amount of net income under variable costing?

C) Calculate the amount of net income under absorption coating?

D) Explain in detail why the net income differs under the two accounting methods?

Reference no: EM133087849

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