80.2K

Verified Solution

Link Copied!

Silver Corporation produces a single product. Last year, the company's variable production costs totaled $7,500 and its fixed manufacturing overhead costs totaled $4,500. The company produced 3,000 units during the year and sold 2,400 units. There were no units in the beginning inventory. Which of the following statements is true?

		The net operating income under absorption costing for the year will be $900 lower than the net operating income under variable costing.
		Under absorption costing, the units in ending inventory will be costed at $2.50 each.
		The ending inventory under variable costing will be $900 lower than the ending inventory under absorption costing.
		Under variable costing, the units in the ending inventory will be costed at $4.00 each.

2.5 points

QUESTION 25

Lagle Corporation has provided the following information:

	Cost per Unit			Cost per Period
Direct materials	$	4.55
Direct labor	$	3.30
Variable manufacturing overhead	$	1.25
Fixed manufacturing overhead				$	11,000
Sales commissions	$	1.30
Variable administrative expense	$	0.35
Fixed selling and administrative expense				$	4200

For financial reporting purposes, the total amount of period costs incurred to sell 5000 units is closest to:

		$11,000
		$4200
		$12,450
		$8250

Answer & Explanation Solved by verified expert

See Answer