Dimmick Corporation produces and sells a single product at $10 per unit. During
ID: 2425545 • Letter: D
Question
Dimmick Corporation produces and sells a single product at $10 per unit. During 2012, the company produced 100,000 units, 90,000 of which were sold during the year. All ending inventory was in finished goods inventory; there was no inventory on hand at the beginning of the year. The following data relate to the company's production process:
Direct materials used in production $ 200,000
Direct labor 180,000
Variable Manufacturing overhead 150,000
Fixed Manufacturing overhead 80,000
Variable Selling and Administrative 175,000
Fixed Selling and Administrative 65,000
Required: Calculate the following.
(a) The unit cost of ending inventory on the balance sheet prepared for stockholders. ______________
(b) The unit cost of ending inventory on a variable cost balance sheet. ______________
(c) The operating income using absorption costing. ______________
(d) The operating income using variable costing. ______________
Please post solutions - need for a study guide. Thank you.
Explanation / Answer
Absorption
Variable
Direct Material
200,000
200,000
Direct Labor
180,000
180,000
Variable Manufacturing overhead
150,000
150,000
Fixed Manufacturing overhead
80,000
Total
610,000
530,000
Cost per unit
6.10
5.30
Absorption
Variable
Sales
900,000
900,000
Less:
-
COGS
549,000
557,000
S & A Exp Var
175,000
175,000
S & A Exp Fixed
65,000
65,000
Net Operatin Income
111,000
103,000
Absorption
Variable
Direct Material
200,000
200,000
Direct Labor
180,000
180,000
Variable Manufacturing overhead
150,000
150,000
Fixed Manufacturing overhead
80,000
Total
610,000
530,000
Cost per unit
6.10
5.30