devry acct346 week 4 assignment 26840

Question

DeVry University

ACCT346 Weekly Assignment

Week 4

Directions: Your assignment this week requires you to answer a four-part problem (Parts A - D) using the company data provided below. As always, please show your work for full credit and use the boxes provided for each answer. If you need more room in an answer box, just add more rows or columns to the box.

MountainAir Company has the following selected data for the past year:

Units sold during year 30,000

Units produced during year 45,000

Units in ending inventory 15,000

Variable manufacturing cost per unit $4.50

Fixed manufacturing overhead (in total) $20,250

Selling price per unit $12.00

Variable selling and administrative expense per unit $1.00

Fixed selling and administrative expenses (in total) $4,000

There were no units in beginning inventory.

Required:

a. Prepare an income statement for last year using absorption (full) costing.

b. Calculate the total value of the ending inventory using absorption (full) costing.

c. Prepare an income statement for last year using variable costing (i.e., contribution margin income statement).

d. Calculate the total value of the ending inventory using variable costing.