Conolly, Inc., manufactures pocket calculators. Costs incurred in making 9,280 c

Question

Conolly, Inc., manufactures pocket calculators. Costs incurred in making 9,280 calculators in April included $29,400 of fixed manufacturing overhead. The total absorption cost per calculator was $9.56.


(a)
Calculate the variable cost per calculator. (Do not round your intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Variable cost per calculator $ 6.39 I understand this

(b)
The ending inventory of pocket calculators was 810 units higher at the end of the month than at the beginning of the month. By how much and in what direction (higher or lower) would operating income for the month of April be different under variable costing than under absorption costing? (Do not round your intermediate calculations. Omit the "$" sign in your response.)

Operating income under variable costing will be $ , lower than
under absorption costing.

(c)
Express the pocket calculator cost in a cost formula. (Do not round your intermediate calculations. Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Total cost = $ 29400 + ($ / calculator

Explanation / Answer

a. fixed overhead/number of calculators manufactured = 29,400/9280 = 3.17 9.56 - 3.17 = 6.39 b. Ending inventory under absoprtion is higher by 810*(29400/9280) = 2566.16 so income for variable costing would be $2566.16 lower than absorption c. total cost = $29400 + $6.39 x number of calcutors

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