Dalton Corporation Has Fixed Manufacturing Cost of $12 Per Unit

question 66

Essay

Dalton Corporation has fixed manufacturing cost of $12 per unit. Consider the three independent cases that follow.
Case A: Absorption- and variable costing income each totaled $240,000 in a period when the firm produced 18,000 units.
Case B: Absorption-costing income totaled $320,000 in a period when finished-goods inventory levels rose by 7,000 units.
Case C: Absorption-costing income and variable-costing income respectively totaled $220,000 and $250,000 in a period when the beginning finished-goods inventory was 14,000 units.
Required:
A. In Case A, how many units were sold during the period?
B. In Case B, how much income would Dalton report under variable costing?
C. In Case C, how many units were in the ending finished-goods inventory?

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Definitions:

Psychosexual Development

Freud's theory that child development is a series of stages during which the pleasure-seeking energies of the id become focused on certain erogenous areas.

Oedipus Complex

A Freudian theory that refers to a child's feelings of desire for their opposite-sex parent and jealousy and envy towards their same-sex parent.

Phallic Stage

A stage in Freudian psychosexual development, occurring in early childhood, where the libido's focus is on the genital area, and the beginnings of sexual identity are formed.

Libido

A phrase in the context of psychoanalytic theory that refers to the libido or sexual longing.