mountain Air Company has the following selected data for the past year:
Units sold during year30,000
Units produced during year45,000
Units in ending inventory15,000
Variable manufacturing cost per unit$4.50
Fixed manufacturing overhead (in total)$20,250
Selling price per unit$12.00
Variable selling and administrative expense per unit$1.00
Fixed selling and administrative expenses (in total)$4,000
There were no units in beginning inventory.
Required:
1a. Prepare an income statement for last year using absorption costing.
1b. Calculate the value of the ending inventory using absorption costing.
1c. Prepare an income statement for last year using variable costing.
1d. Calculate the value of the ending inventory using variable costing.
