Dimmick Corporation produces and sells a single product at $40 per unit. During
2007, the company produced 200,000 units, 160,000 of which were sold during
the year. All ending inventory was in finished goods inventory; there was no
inventory on hand at the beginning of the year. The following data relate to the
company's production process:
Calculate the following.
(a) The unit cost of ending inventory on the balance sheet prepared for
(b) The unit cost of ending inventory on a variable cost balance sheet.
(c) The operating income using absorption costing
(d) The operating income using variable costing.
(e) The ending inventory using absorption costing.
(f) The ending inventory using variable costing.
(g) A reconciliation of the difference in operating income between absorption
costing and variable costing using the shortcut method.
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