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Envelope Company had the following information during the previous year for one of its product lines: Sales price per unit: $450 • Units in beginning inventory: 0 • Units started during the year: 35,000 • Units sold: 28,000 Variable costs per unit: ● ● Direct materials: $70 • Direct labor: $180 • Variable overhead costs: $50 Fixed costs: • Fixed overhead per unit: $30 • General and administrative: $1,000,000 To Do 1. Calculate the ending inventory value and prepare an income statement using absorption costing. 2. Calculate the ending inventory value and prepare an income statement using variable

Envelope Company had the following information during the previous year for one of its product lines: Sales price per unit: $450 • Units in beginning inventory: 0 • Units started during the year: 35,000 • Units sold: 28,000 Variable costs per unit: ● ● Direct materials: $70 • Direct labor: $180 • Variable overhead costs: $50 Fixed costs: • Fixed overhead per unit: $30 • General and administrative: $1,000,000 To Do 1. Calculate the ending inventory value and prepare an income statement using absorption costing. 2. Calculate the ending inventory value and prepare an income statement using variable

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Envelope Company had the following information during the previous year for one of its product lines: • Sales price per unit: $450 • Units in beginning inventory: 0 • Units started during the year: 35,000 • Units sold: 28,000 Variable costs per unit: • Direct materials: $70 • Direct labor: $180 • Variable overhead costs: $50 Fixed costs: • Fixed overhead per unit: $30 • General and administrative: $1,000,000 To Do 1. Calculate the ending inventory value and prepare an income statement using absorption costing. 2. Calculate the ending inventory value and prepare an income statement using variable costing.
Transcribed Image Text:Envelope Company had the following information during the previous year for one of its product lines: • Sales price per unit: $450 • Units in beginning inventory: 0 • Units started during the year: 35,000 • Units sold: 28,000 Variable costs per unit: • Direct materials: $70 • Direct labor: $180 • Variable overhead costs: $50 Fixed costs: • Fixed overhead per unit: $30 • General and administrative: $1,000,000 To Do 1. Calculate the ending inventory value and prepare an income statement using absorption costing. 2. Calculate the ending inventory value and prepare an income statement using variable costing.
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