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    13-B3 Youngstown Manufacturing Comparison Variable Costing

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    Consider the following information pertaining to a year's operations of Youngstown Manufacturing:

    Units sold 1,400
    Units produced 1,600
    Direct labor $4,200
    Direct materials used 3,500
    Fixed manufacturing overhead 2,200
    Variable manufacturing overhead 300
    Selling and administrative expenses (all fixed) 700
    Beginning inventories 0
    Contribution margin 5,600
    Direct-material inventory, end 800

    There are no work-in-process inventories.

    1. What is the ending finished-goods inventory cost under absorption costing?
    2. What is the ending finished-goods inventory cost under variable costing?

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    Solution Summary

    This solution show how to compute the ending finished-goods inventory under absorption and variable costing.