Indiana Company incurred the following costs during the previous year when plann

Question

Indiana Company incurred the following costs during the previous year when planned production and actual production each totaled 20,000 units:

Indiana's per-unit inventoried cost under variable costing is (Do not round your intermediate calculations round your final answer to 2 decimal places):

$40.00.

$33.50.

$46.00.

$15.00.

$30.50.

Indiana's per-unit inventoried cost under absorption costing is:

$40.00.

$46.00.

$15.00.

$30.50.

$33.50.

  Direct materials used $280,000      Direct labor 170,000      Variable manufacturing overhead 220,000      Fixed manufacturing overhead 130,000      Variable selling and administrative costs 60,000      Fixed selling and administrative costs 90,000   

Explanation / Answer

a) Per-unit inventoried cost under variable costing = (280000+170000+220000) / 20000 = $33.5

b) Per-unit inventoried cost under absorption costing = (280000+170000+220000+130000) / 20000 = $40

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