What per-unit inventory cost reported on grehans sheet

Assignment Help Managerial Accounting

Reference no: EM13948949

Grehan Company produces and sells wooden pallets that are used in moving and stacking materials. The operating costs for the past year were as follows:

Variable costs per unit:
Direct materials $3.60
Direct labor 2.00
Variable overhead 0.40
Variable selling expenses 0.30
Fixed costs per year:
Fixed overhead $180,000
Fixed selling and administrative 70,000

During the year, Grehan produced 200,000 wooden pallets and sold 207,000 at $10 each. Grehan had 9,300 pallets in beginning finished goods inventory; costs have not changed from last year to this year. An actual costing system is used for product costing.

Required

1. What per-unit inventory cost will be reported on Grehan's balance sheet at the end of the year? What will be the reported income?

2. What would the per-unit inventory cost be under variable costing? Does this differ from the unit cost computed in Requirement 1? Why? What would income be using variable costing?

3. Reconcile the difference between the variable-costing and absorption-costing income figures.

4. Suppose that Grehan Company had sold 196,700 pallets during the year. What is the absorption-costing income? What is the variable-costing income?

5. Reconcile the difference between the variable-costing and absorption-costing income figures in requirement 4.

Reference no: EM13948949

Questions Cloud

To calculate the present value of a business : To calculate the present value of a business, the firm's free cash flows should be discounted at the firm's:

Write a class representing a line item in a shopping cart : Test the program and provide a list of comprehensive test cases used to validate the application and include these test cases in a word document containing all UML diagrams and descriptions.

What are interest and principal portions in second payment : A 15-year, $160,000 mortgage has a rate of 5.7 percent. What are the interest and principal portions in the first payment? What are the interest and principal portions in the second payment?

What is the significance of the correlations : What is the strength of the correlations between the variables? What measure of quality is impacted most by relationship conflict? Task Conflict? What is the significance of the correlations?

What per-unit inventory cost reported on grehans sheet : What per-unit inventory cost will be reported on Grehan's balance sheet at the end of the year? What will be the reported income?

Most expensive type of external financing of equity : What is the most expensive type of EXTERNAL financing of equity for a company? Why? How can a company use economies of scale when it comes to external raising of capital through equity? Describe the types of fees that are typically included in flotat..

What is the firm weighted average cost of capital : The Imaginary Products Co. currently has debt with a market value of $250 million outstanding. The debt consists of 9 percent coupon bonds (semiannual coupon payments) which have a maturity of 15 years and are currently priced at $983.90 per bond. If..

Program that asks user how many automobiles are to describe : Write a program that asks the user how many automobiles are to be described, and for each automobile it inputs the user's selection of make and color. Then it outputs color and make.

Barter economy versus an economy : Would you be willing to give up your checkbook and instead use an electronic means of payment if it were made available? Why or why not?

User Account

All Pages