Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

1) Advanced Company reports the following information for the current year. All

ID: 2488893 • Letter: 1

Question

1) Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.

Given Advanced Company's data, compute cost per unit of finished goods under variable costing.

$40.00

$45.00

$41.88

$43.00

$48.00

2) Given Advanced Company's data, compute cost per unit of finished goods under absorption costing.

$40.00

$53.33

$45.00

$43.00

$48.00

3) Given Advanced Company's data, compute cost of finished goods in inventory under variable costing.

$672,000

$1,680,000

$1,008,000

$602,000

$903,000

4) Given Advanced Company's data, and the knowledge that the product is sold for $71 per unit and operating expenses are $300,000, compute the net income under absorption costing.

$70,000

$113,000

$210,700

$183,000

$288,000

5) Given Advanced Company's data, compute cost of finished goods in inventory under absorption costing.

$672,000

$1,680,000

$1,008,000

$602,000

$903,000

1) Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.

Explanation / Answer

1) variable overhead per unit = $105000 /35000 units = $3 /unit

2)

3) Units in finished goods = Number of units produced - units sold = 35000-21000 = 14000

Cost of finished goods under variable costing

= variable cost of production per unit x number of units in finished goods

= $43 / unit x 14000 = $602000

4)

Cost of goods sold

= cost of production - cost of finished goods

= $1680000 - $602000

= $1078000

5)

Cost of finshed goods in inventory under absorption costing

= Cost per unit under absorption costing x Number of units in closing inventory

= $ 48 x 14000

= $672000

Variable cost of procudction per unit ($) Dierect meatirials 19.00 Direct labour 21.00 Variable overhead 3.00    Variable cost of production per unit 43.00