I-23.01 Problem

# I-23.01 Problem - Annual fixed SG&A totals \$1,450,000....

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I-23.01 MicroDecor produces stylish microwave ovens. Each unit sells for \$600. During 20X7, the company produced 22,000 units, and sold 20,000 units. Beginning inventory contained a total of 3,000 units. Production and SG&A costs have been stable for many years. Assume the per units costs in beginning and ending inventory are identical. Per unit cost information follows: Direct materials cost \$ 150 Direct labor cost 100 Variable factory overhead 75 50 Annual fixed manufacturing overhead is \$242,000.
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Unformatted text preview: Annual fixed SG&A totals \$1,450,000. (a) Determine the number of units in ending inventory, and calculate the total carrying cost using both variable and absorption costing. (b) Calculate 20X7 net income using variable costing. (c) Calculate 20X7 net income using absorption costing. (d) In practice, is it likely that per unit costs would be identical in beginning and ending inventory? Even if costs were stable, could the cost of beginning and ending inventory differ with absorption costing?...
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## This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.

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