Purchase Solution

Biff Enterprises: Inventory, absorption & variable costing

Not what you're looking for?

Ask Custom Question

Biff Enterprises, Inc. reports the following information:
2009 2010 2011

Units sold 20,000 20,000 20,000
Units produced 20,000 24,000 16,000
Fixed production costs $1,200,000 $1,200,000 $1,200,000
Variable production costs per unit $ 200 $ 200 $ 200
Selling price per unit $ 400 $ 400 $ 400
Fixed selling and administrative expenses $ 400,000 $ 400,000 $ 400,000

Calculate the value of the ending inventory using both absorption costing and variable costing.

Purchase this Solution
Solution Summary

This solution contains a tutorial showing analysis of units in ending, cost using variable costing and cost using absorption costing.

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

View More Free Quizzes
Related BrainMass Solutions

  • JT Enterprises. Unit product cost using absorption costing

    The reasons are: Under absorption costing the fixed manufacturing cost is inventoriable. Thus, if the inventory level increase during the period, the income reported will be higher than that in case of variable costing.

  • Inventory Cost using Variable & Absorption Costing

    312117 Inventory Cost using Variable & Absorption Costing The following production data came from the records of LeShaq Athletic Enterprises for the year ended December 31, 2011 matierals 480000 labor 260000 variable factory

  • Variable and Absorption Costing

    The company began the quarter with no inventory; it manufcatured 30,000 units over the period. Variable selling and administrative expenses are based on unites sold. A. Calc. the unit product cost using absorption costing. B.

  • Ending finished goods inventory and operating income

    Assuming now that J&G uses direct (variable) costing, what is the operating income? a. $1,000,000 b. $1,250,000 c. $1,500,000 d. $1,800,000 e. $2,300,000 6. In absorption costing all manufacturing costs are a part of inventory.

  • Variable and absorption costing

    The difference between variable costing and absorption costing is that the fixed manufacturing expenses are expensed in the period in variable costing and are taken into inventory in absorption costing.

  • Absorption vs variable costing

    The amount of finished goods inventory would be 75,000+42,000=$117,000 The solution explains the calculations under variable costing and absorption costing

  • Income statements using variable and absorption costing

    Variable costing net operating income $1,650,500 Add fixed manufacturing overhead costs released from inventory under absorption costing 0 Deduct fixed manufacturing overhead costs released from inventory under absorption costing (5.08X30,000)

  • Absorption Costing

    In absorption costing the fixed manufacturing overhead is added to the inventory cost while in variable costing the fixed manufacturing overhead is expensed.

  • Absorption and variable costing

    This explains the Absorption and variable costing by practical example

View More Related Solutions