4. Under 100% sales assumption using absorption costing, the ending inventory balance is5. Under 75% sale assumption, using absorption costing, the ending inventory balance is?6. Under 75% sale assumption, using variable costing, the ending inventory balance is? XYZ Company anticipates the following costs during the first year ofoperations. The company is attempting to project profitability if 100% ofproduction is sold, and if 75% of production is sold. Use the pick listsassociated with the boxed areas to select amounts for each cost category in theabsorption and variable costing income statements that follow. Correctselections will turn the boxed areas green. Afterwards, answer the questions atthe bottom of the spreadsheet.Direct materialsDirect laborVariable manufacturing overheadFixed manufacturing overheadVariable selling, general, and administrativeFixed selling, general, and administrativeSalesAbsorption v. variable costing.xlsxAssumption >>>>Less: SG&ALess: Cost of goods soldGross profitIncomeXYZ CompanyABSORPTON COSTING INCOME STATEMENTFor the Year Ending December 31, 20XX75% SoldSalesAssumption >>>>Less: Variable product costVariable manufacturing marginIncomeLess: Variable SG&AContribution marginLess: Fixed expenses450,000XYZ CompanyVARIABLE COSTING INCOME STATEMENTFor the Year Ending December 31, 20XX95,00092,50075% Sold450,000187,500262,500262,500350,000187,500 250,00045,000150,000150,00067,50075,00025,000How much is ending inventory if 75% of the production is sold, and:XYZ uses absorption costing? >>>>XYZ uses variable costing? >>>>100,00010% of sales50,000100% Sold600,000110,000140,000100% SoldHONDA60,000217,500 290,000600,000250,000350,000150,000140,000Notice that income is the same under absorption and variable costing if all production is sold. This isnot true when only 75% of production is sold because all of the manufacturing overhead is chargedagainst income under variable costing, but not absorption costing.87,50062,500Notice that the $25,000 difference between ending inventory amounts ($87,500 and $62,500) is equalto the difference in income ($92,500 v. $67,500). This occurs because $25,000 of fixedmanufacturing overhead is assigned to inventory under absorption costing but charged against incomeunder variable costing.

Name: 4. Under 100% sales assumption using absorption costing, the ending in
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Description: 4. Under 100% sales assumption using absorption costing, the ending inventory balance is5. Under 75% sale assumption, using absorption costing, the ending inventory balance is?6. Under 75% sale assumption, using variable costing, the ending inventory