13-B3 Comparison of Variable Costing and Absorption Costing
Consider the following information pertaining to a year’s operations of Youngstown Manufacturing:
|
Units sold |
= 1,400 |
|
Units produced |
= 1,600 |
|
Direct labor |
= $4,200 |
|
Direct materials used |
= 3,500 |
|
Fixed manufacturing overhead |
= 2,200 |
|
Variable manufacturing overhead |
= 300 |
|
selling and administrative expenses (all fixed) |
= 700 |
|
Beginning inventorie |
= 0 |
|
Contribution margin |
= 5,600 |
|
Direct-material inventory, end |
= 800 |
There are no work-in-process inventories.
1. What is the ending finished-goods inventory cost under absorption costing?
2. What is the ending finished-goods inventory cost under variable costing?