1) What is the ending inventory (February) under variable costing?2) What is the ending inventory (February) under absorption costing? Everlasting Co. has the following data pertaining to its 1st quarterof operations:Activity level unitsProductionSalesFebruary10,0007,000MarchJanuary10,00010,00010,00011,000Cots incurred in the different areas of operation were as follows:PerunitPermonthP 20Direct MaterialsDirect Labor15Variable factoryoverheadFixed factory overheadVariable selling andadministrative12P60,000||Fixed selling andadministrative30,000Fixed factory overhead costs per month are based on thecompany's normal capacity of 10,000 units. The company sellsthe product at P75 per unit.

The entity uses two types of costing systems, which are as follows: (1) Variable costing…

Answered: ) What is the ending inventory…

) What is the ending inventory (February) under variable costing? 2) What is the ending inventory (February) under absorptio

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1) What is the ending inventory (February) under variable costing?

2) What is the ending inventory (February) under absorption costing?

Everlasting Co. has the following data pertaining to its 1st quarter
of operations:
Activity level units
Production
Sales
February
10,000
7,000
March
January
10,000
10,000
10,000
11,000
Cots incurred in the different areas of operation were as follows:
Per
unit
Per
month
P 20
Direct Materials
Direct Labor
15
Variable factory
overhead
Fixed factory overhead
Variable selling and
administrative
12
P60,000||
Fixed selling and
administrative
30,000
Fixed factory overhead costs per month are based on the
company's normal capacity of 10,000 units. The company sells
the product at P75 per unit.

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