Question

Absorption and Variable Costing; Inventory Valuation Bondware Inc., has a highly automated assembly line that uses very little direct labor. Therefore, direct labor is part of variable overhead. For March, assume that it incurred the following unit costs: Direct materials $520 Variable overhead 460 Fixed overhead 180The 100 units of beginning inventory for March had an absorption costing value of $92,000 and a variable costing value of $78,000. For March, assume that Bondware Inc. produced 500 units and sold 540 units.
Compute Bondware's March Cost of Goods Sold using both the variable and absorption costing methods.

Answer 1

Answer:

Following are the response to the given question:

Explanation:

                            Cost of Goods Sold  

Absorption costing $92000+440\times (520+460+180) \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ = 602400$

Variable costing $78000+440\times (520+460) \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ =509200$