accounting 5528105 2 | assignmentcollections.com
accounting 5528105 2 | assignmentcollections.com
| OUtback Store produces Canoes. Information for the first three years of business is as follows: | |||||||||||
| 2014 | 2015 | 2016 | Total | ||||||||
| Units Sold | 5,000 | 5,000 | 5,000 | 15,000 | |||||||
| Units Produced | 5,000 | 6,000 | 4,000 | 15,000 | |||||||
| Fixed Production Costs | $50,000 | $50,000 | $50,000 | ||||||||
| Variable Production Costs per Unit | $75 | $75 | $75 | ||||||||
| Selling Price | $225 | $225 | $225 | ||||||||
| Fixed Selling and Administrative Expenses | $5,000 | $5,000 | $5,000 | ||||||||
| Required: | |||||||||||
| Calculate profit and the value of ending inventory for each year using full costing | |||||||||||
| Explain why profit fluctuates from year to year even though the units sold and selling price remains the same | |||||||||||
| Calculate profit and the value of ending inventory for each year using variable costing | |||||||||||
| Explain why when using variable costing profit does not fluctuate from year to year | |||||||||||
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