T3-6 Variable versus absorption costing (LO 1, 2) Regal Printing, Inc., prints and binds encyclopedias. The following information was found in the accounting records: Sales price per unit $ 103 Direct materials per unit $ 50 Direct labor per unit $ 16 Variable overhead per unit $ 10 Fixed overhead per unit $ 23 Fixed selling costs $ 55,000 Variable selling costs $180,000 Beginning inventory 0 Units produced 100,000 Units sold 90,000 Questions a.Under absorption costing, what is Regal's operating income? b.Under variable costing, what is Regal's ending Finished Goods Inventory balance?
T3-6 Variable versus absorption costing (LO 1, 2) Regal Printing, Inc., prints and binds encyclopedias. The following information was found in the accounting records: Sales price per unit $ 103 Direct materials per unit $ 50 Direct labor per unit $ 16 Variable overhead per unit $ 10 Fixed overhead per unit $ 23 Fixed selling costs $ 55,000 Variable selling costs $180,000 Beginning inventory 0 Units produced 100,000 Units sold 90,000 Questions a.Under absorption costing, what is Regal's operating income? b.Under variable costing, what is Regal's ending Finished Goods Inventory balance?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
T3-6 Variable versus absorption costing (LO 1, 2) Regal Printing, Inc., prints and binds encyclopedias. The following information was found in the accounting records:
| Sales price per unit |
$ 103
|
| Direct materials per unit |
$ 50
|
| Direct labor per unit |
$ 16
|
| Variable overhead per unit |
$ 10
|
| Fixed overhead per unit |
$ 23
|
| Fixed selling costs |
$ 55,000
|
| Variable selling costs |
$180,000
|
| Beginning inventory |
0
|
| Units produced |
100,000
|
| Units sold |
90,000
|
Questions
a.Under absorption costing, what is Regal's operating income?
b.Under variable costing, what is Regal's ending Finished Goods Inventory balance?
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