Question

Columbia Corporation produces a single product. The company's variable costing income statement for November appears below:

Columbia Corporation
Income Statement
For the Month ended November 30
Sales ($17 per unit)	$	742,900
Variable expenses:
Variable cost of goods sold		393,300
Variable selling expense		131,100
Total variable expenses		524,400
Contribution margin		218,500
Fixed expenses:
Manufacturing		107,040
Selling and administrative		71,360
Total fixed expenses		178,400
Net operating income	$	40,100

During November, 35,680 units were manufactured and 8,820 units were in beginning inventory. Variable production costs have remained constant on a per unit basis over the past several months.

The value of the company's inventory on November 30 under absorption costing would be:

Answer 1

Answer:=Total sales units =$742900/$17 per unit =43700 units

Closing Inventory =43700 units-35680 units-8820 units =800 units

Variable cost of goods sold per unit =$393300/43700 units=$9 per unit

Fixed manufacturing per unit =$107040/35680 units=$3 per unit

Unit product cost under Absorption costing:-Direct materials + Direct Labor+Variable manufacturing overhead + fixed manufacturing overhead

=$9 per unit +$3 per unit =$12 per unit

The value of the company's inventory on November 30 under absorption costing would be:800 unit*$12 per unit =$9600