How to determine units in ending inventory

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XYZ company manufactures toy cars and sells them for $5 per car. It manufactures 15000 cars and sold 10000 of them. No inventory at the starting of the year.

Direct material 100000

Direct labor 80000

Factory overhead (unit-level cost) 35000

Factory overhead (capacity cost) 100000

Selling and administrative (unit-level cost) 35000

Selling and administrative (capacity cost) 65000

Problem 1. How to determine unit cost using absorption costing and variable costing?

Problem 2. What steps to take to determine the operating income using absorption costing and variable costing?

Problem 3. How to determine units in ending inventory?

Reference no: EM132706431

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