Reference no: EM132527293
Question - Emerson Corporation just completed its first year of operations. Planned and actual production equaled 10,000 units, and sales totaled 9,600 units at $72 per unit. Cost data for the year are as follows:
Direct material (per unit) $12
Conversion cost:
Direct labor 45,000
Variable manufacturing overhead 65,000
Fixed manufacturing overhead 220,000
Selling and administrative costs:
Variable (per unit) 8
Fixed 118,000
Required -
1. Compute the company's total cost for the year assuming that variable manufacturing costs are driven by the number of units produced and variable selling and administrative costs are driven by the number of units sold.
2. How much of this cost would be head in year-end inventory under (a) absorption costing (b) variable costing?
3. How much of the company's total cost for the year would be included as an expense on the period's income statement under (a) absorption costing (b) variable costing?