Last year fabre company produced 20000 units and sold 18000

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Last year, Fabre Company produced 20,000 units and sold 18,000 units at a price of $12. Costs for last year were as follows:

Direct Materials: $25,000
Direct Labor: 35,000
Variable factory overhead: 12,000
Fixed Factory Overhead: 37,000
Fixed Selling Expense: 7,500
Variable Selling Expense: 9,000
Fixed Administrative Expense: 15,500

Fixed facotry overhead is applies based on expected production. Last year, Fabre expected to produce 20,000 units.
1) Assuming that begining inventory was zero, what is the value of ending inventory under absorbtion costing?

2) Assuming begining inventory was zero, what is the value of ending inventory under variable costing?

3) What is operatiing income for last year under absoption costing?

4) What is operating income for last year under variable costing?

Reference no: EM13587560

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