Asked by Total Sport Productions on Jul 17, 2024
Verified
In Henkel Company 50000 units are produced and 40000 units are sold. Variable manufacturing costs per unit are $8 and fixed manufacturing costs are $120000. The cost of the ending finished goods inventory under each costing approach is: Absorption Variable Costing ‾ Costing ‾\begin{array}{cc}\text { Absorption } & \text { Variable } \\ \underline{\text { Costing }} & \underline{ \text { Costing }}\end{array} Absorption Costing Variable Costing
A) $104,000$80,000\begin{array}{lrr}& \$ 104,000 & \$ 80,000 \\\end{array}$104,000$80,000
B) 104,000100,000\begin{array}{lrr} & 104,000 && 100,000 \\\end{array}104,000100,000
C) 112,00080,000\begin{array}{lrr}& 112,000 && 80,000 \\\end{array}112,00080,000
D) 1,120,000100,000\begin{array}{lrr}& 1,120,000 & 100,000\end{array}1,120,000100,000
Variable Manufacturing Costs
Costs that vary directly with the level of production output, such as raw materials and direct labor costs.
Fixed Manufacturing Costs
Overheads or expenses that do not change with the level of production, such as rent and salaries.
Costing Approach
A costing approach is a method or technique used to determine the cost of a product or service, which can include different methodologies like absorption costing or activity-based costing.
- Understand the differences between variable costing and absorption costing.
Verified Answer
Learning Objectives
- Understand the differences between variable costing and absorption costing.
Related questions
How Will Net Income Under Variable Costing Compare to Net ...
Which of the Following Statements Is Correct Using the Direct ...
Managers Can Use Variable Costing Information for Internal Decision Making,but ...
Which of the Following Statements Is True Regarding Absorption Costing ...
The Carrying Value on the Balance Sheet of the Ending ...