Figure 8-5. Sanders Company has the following information for last year:
Selling price
$190 per unit
Variable production costs
$52 per unit produced
Variable selling and admin. expenses
$18 per unit sold
Fixed production costs
$240,000
Fixed selling and admin. expenses
$180,000
Units produced
12,000
Units sold
7,000
There were no beginning inventories.
1. Refer to Figure 8-5. What is the value of ending inventory for Sanders using the absorption costing method?
a.
$360,000
b.
$280,000
c.
$220,000
d.
$380,000
2. Refer to Figure 8-5. What is the income for Sanders using the absorption costing method?
$520,000
$480,000
$1,200,000
$500,000
3. Refer to Figure 8-5. What is the cost of ending inventory for Sanders using the variable costing method?
$300,000
$120,000
$260,000
4. Refer to Figure 8-5. What is the income for Sanders using the variable costing method?
$420,000
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