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Castern, Inc. uses Absorption Costing to prepare its published financial statements and Variable Costing for...

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Accounting

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Castern, Inc. uses Absorption Costing to prepare its published financial statements and Variable Costing for internal reports. COST OF BEGINNING INVENTORY UNITS ABSORPTION COSTING VARIABLE COSTING # of Cost Per Total Cost Per Total UNITS UNIT Cost UNIT Cost Produced in 2019: 10,000 u $33 $330,000 $27 $270,000 Produced in 2020: 5,000 u $38 $190,000 $26 $130,000 Produced in 2021: 15,000 u $35 $525,000 $30 $450,000 Beg Inv Units 30,000 u Absorption $1,045,000 Variable $850,000 During 2022, the firm produced 6,000 units. During 2022, the firm sold 25,000 units at a sales price of $50/u. The firm uses a LAST-IN-FIRST-OUT (LIFO) inventory assumption. Selected product costs per unit for 2022: DM $ 21 per unit DL $ 8 per unit Variable Manu Overhead $ 3 per unit Fixed Manu Overhead $ 60,000 in total Fixed Selling and Admin Costs $ 85,000 in total Variable Selling and Admin Expenses $5 per unit 1. Prepare a chart showing unit product costs for Absorption and Variable costing. 2. Prepare an Income Statement using Absorption Costing and one using Variable Costing. 3. Compute Ending Inventory number of units and dollars under Absorption and Variable Costing

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