Evaluation of month end inventory using absorption costing

Assignment Help Accounting Basics

Reference no: EM13824242

Problem-

DeAnne Company produces a single product. The company's variable costing income statement for August appears below:

DeAnne Company

Income Statement For the month ended August 31
Sales ($20 per unit)	$ 802,000

Variable expenses:
Variable cost of goods sold	521,300
Variable selling expense	80,200

Total variable expenses	601,500

Contribution margin	200,500

Fixed expenses:
Fixed manufacturing	142,880
Fixed selling and administrative	35,720

Total fixed expenses	178,600

Net operating income	$ 21,900

The company produced 35,720 units in August and the beginning inventory consisted of 8,340 units. Variable production costs per unit and total fixed costs have remained constant over the past several months. Under absorption costing, the ending inventory for the month ended August 31 would be reported at:

a. $51,480

b. $75,240

c. $67,320

d. $80,240

Additional Requirement-

The problem belongs to Basic Accounting and it illustrate about evaluation of month end inventory using absorption costing.

Reference no: EM13824242

Questions Cloud

What you should know about negotiating with the japanese : Your reactions to the article "What You should Know about Negotiating with the Japanese" Note you will be redirected to Business Insider, at that point, you may need to wait a few seconds for the article to load.

Level curves or the corner-point method : You may employ either the level curves or the corner-point method. The graph may be sketched using the drawing tools in Excel as per the video demonstration on the multimedia page and submitted as an Excel attachment.

Project procurement management plan : Project Procurement Management Plan

Discuss the advantages of the approach : Briefly explain the main problem addressed and why you have found it interesting - Classify to which topic from the aforementioned areas this paper belongs.

Evaluation of month end inventory using absorption costing : The problem belongs to Basic Accounting and it illustrate about evaluation of month end inventory using absorption costing

Probability that paper has been chosen from first student : Two student groups of 40 students each scored, respectively, between 45% to 85% (first group) and 55% to 90% (second group) on the test. A paper is randomly chosen from the two groups and shows the score of 78%. What is the probability that the pa..

Explain how technology has affected the lives of individuals : Explain how technology has affected the lives of the individuals. Describe any individuals with disabilities you have personally observed who have similar stories. How has technology affected their lives?

Report on operations and quality assessment : Report On Operations And Quality Assessment

Traditional contribution margin method : What is the profit if the traditional contribution margin method is used for determining CKC's product mix? What is the profit if the bottleneck method advocated by Troy is used for selecting the product mix?

User Account

All Pages