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The following questions are based on Waist Restraint Corporation, which produces belts that sell for $15 per unit. Of the 100,000 units produced, 80,000 were sold during the year. All ending inventory was in finished-goods inventory.The firm had no inventory at the beginning of the year.
Direct material (unit-level cost)
$240,000
Direct labor (unit-level cost)
160,000
Factory overhead (unit-level cost)
80,000
Factory overhead (capacity cost)
240,000
Selling and administrative (unit-level cost)
Selling and administrative (capacity cost)
128,000
Required:
a)In presenting inventory on the balance sheet at December 31, what is the unit cost under absorption costing?
b)In presenting inventory on a variable-costing balance sheet, what is the unit cost?
c)What is the operating profit using variable costing?
d)What is the operating profit under absorption costing?
e)What is the ending inventory (dollar amount) using absorption costing?
f)What is the ending inventory (dollar amount) under variable costing?
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