(Absorption and Variable Costing) Clear Auto Glass sold 3,500 windshields in 2011 and produced a total of 4,000 windshields. Total costs incurred for the year included the following:
|
Direct materials |
$450,000 |
|
Direct labour |
300,000 |
|
Variable manufacturing overhead |
150,000 |
|
Variable selling expenses |
175,000 |
|
Fixed administrative expenses |
200,000 |
|
Fixed manufacturing overhead |
350,000 |
In January 2011, the beginning inventory of windshields was zero.
- Compute the ending finished goods inventory under both absorption and variable costing.
- Compute the cost of goods sold under both absorption and variable costing