Home Base, Inc. reports the following production cost information: Beginning inv

Question

Home Base, Inc. reports the following production cost information:

Beginning inventory 10,000 units

Units produced 97,000 units

Units sold 92,000 units

Direct labor $17 per unit

Direct materials $34 per unit

Variable overhead $2,522,000 in total

Fixed overhead $1,940,000 in total

Operating costs $2,000,000 in total

Assume that productions costs have remained the same since the previous period and all units are sold for $137.00 per unit.

Required:

a. Compute production cost per unit under variable costing.

b. Compute production cost per unit under absorption costing.

c. Determine net income using variable costing.

d. Determine net income using absorption costing.

Explanation / Answer

a)

Cost of production per unit under variable costing = $7469000 / 97000 units = $77 per unit

b)

Production cost per unit under absorption costing = $9409900 / 97000 units = $97 per unit

c)

d)

Beginning inventory of finshed goods 10000 Add: produced 97000 units of goods available for sale 107000 units sold -92000 units in ending inventory 15000

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.