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seraphim [82]
3 years ago
11

Absorption and Variable Costing; Inventory Valuation Bondware Inc., has a highly automated assembly line that uses very little d

irect labor. Therefore, direct labor is part of variable overhead. For March, assume that it incurred the following unit costs: Direct materials $500 Variable overhead 440 Fixed overhead 160 The 100 units of beginning inventory for March had an absorption costing value of $90,000 and a variable costing value of $76,000.
For March, assume that Bondware Inc. produced 500 units and sold 540 units.
Compute Bondware's March amount of ending inventory under both absorption and variable costing if the FIFO inventory method was used.
Ending Inventory
Absorption Costing $ (Answer)
Variable Costing $ (Answer)
Business
1 answer:
igor_vitrenko [27]3 years ago
5 0

Answer:

Bondware Inc.

FIFO Inventory Method:

Ending Inventory (60 units):

Absorption Costing = $66,000

Variable Costing = $56,400

Explanation:

a) Data and Calculations:

Unit Production Costs for March:

Direct materials     $500

Variable overhead   440

Total variable cost $940

Fixed overhead        160

Total manufacturing

  costs per unit   $1,100

Calculation of Ending Units of Inventory:

Beginning units     100

Units produced = 500

Units sold =         (540)

Ending units =        60

Beginning Inventory, 100 units:

Absorption costing value = $90,000

Variable costing value = $76,000

FIFO Inventory Method:

Ending Inventory:

Absorption Costing = 60 * $1,100 = $66,000

Variable Costing = 60 * $940 =       $56,400

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Option (D) is correct.

Explanation:

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3 years ago
The Home and Garden (HG) chain of superstores imports decorative planters from Italy. Demand for the planters is stable and aver
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Answer:

The average inventory which HG should carry during the year is 5,000 units.

Explanation:

Economic Order Quantity is the ideal inventory procurement which minimizes holding and ordering cost. The EOQ is used by businesses in order to determine the best possible inventory holding.

EOQ = \sqrt{\frac{2*Annual Demand * Ordering Cost}{Annual Holding Cost} }

EOQ = \sqrt\frac{2*7,500*5,000}{10*0.3}

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6 0
2 years ago
Administrative activities, such as archiving project files, closing out contracts, documenting lessons learned, and receiving fo
antiseptic1488 [7]

Answer:

Administrative activities, such as archiving project files, closing out contracts, documenting lessons learned, and receiving formal acceptance of the delivered work as part of the phase or project, are often involved in closing.

Explanation:

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4 0
3 years ago
During the year, Trombley Incorporated has the following inventory transactions.
Furkat [3]

Answer:

a. Ending inventory = $162, Cost of Sales = $593, Gross Profit = $478

b. Ending inventory = $227, Cost of Sales = $528, Gross Profit = $543

c. Ending inventory = $492.30, Cost of Sales = $557.94 , Gross Profit = $513.06

d. FIFO

Explanation:

FIFO

Ending inventory = 18 units × $9   = $162

                                Total               = $162

Cost of Sales = 11 units × $13 = $143

                         16 units × $12= $192

                         21 units × $11 = $231

                           3 units × $9 = $27

                         Total              = $593

Gross Profit = Sales less Cost of Sales

                   = (51 units × $21) - $593

                   = $1,071 - $593

                   = $478

LIFO

Ending inventory = 11 units × $13    = $143

                                 7 units × $12   =  $84

                                 Total               = $227

Cost of Sales = 9 units × $12 = $108

                         21 units × $11 = $231

                         21 units × $9 = $189

                         Total              = $528

Gross Profit = Sales less Cost of Sales

                   = (51 units × $21) - $528

                   = $1,071 - $528

                   = $543

Weighted-average cost

First determine the average cost.

Average cost = Total Cost / Total units

                      = $ 755 / 69

                      = $10.94

Ending inventory = Units Remaining × Average Price

                             = 45 units × $10.94

                             = $492.30

Cost of Sales = Units Sold × Average Cost

                      = 51 units × $10.94

                      = $557.94

Gross Profit = Sales less Cost of Sales

                   = (51 units × $21) - $557.94

                   = $1,071.00 - $557.94

                   = $513.06

8 0
2 years ago
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3 years ago
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