Chamiching makes hacksaw blades. Inventory values are determined using the first in, first out (FIFO)...
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Chamiching makes hacksaw blades. Inventory values are determined using the first in, first out (FIFO) method. Production and sales data for the first three years appear below. Hacksaw blades Sold Produced Yr 1 18,000 22,000 Yr 2 25,000 23,000 Yr 3 37,000 35,000 Sales price Full cost Yr 1 $10.00 $6.00 Yr 2 $11.00 $6.60 Yr 3 $12.00 $7.60 For Chamiching, which of the following is true? In the first year, variable costs accounted for half of the full costs. Total fixed production costs increased each subsequent year by 20%, as a result of step-fixed costs and a general inflationary price increase. The variable cost of Yr 2 ending inventory is $6,887 The full cost of Yr 2 ending inventory is double the variable cost ending inventory There are 3,000 hacksaw blades in ending inventory The fixed cost per unit in Yr 3 is $2.72 None of the above
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