Pandora Brewing Company's planned production for the year just ended was units. This production level was achieved, but
only units were sold. Other data follow:
Direct material used
Direct labor incurred
Fixed manufacturing overhead
Variable manufacturing overhead
Fixed selling and administrative expenses
Variable selling and administrative expenses
Finishedgoods inventory, January
None
The cost per unit remained the same in the current year as in the previous year. There were no workinprocess inventories at the
beginning or end of the year.
Required:
What would be Pandora Brewing Company's finishedgoods inventory cost on December under the variablecosting method?
Note: Do not round intermediate calculations.
a Which costing method, absorption or variable costing, would show a higher operating income for the year?
b By what amount?
Note: Do not round intermediate calculations.
