Coastal Corporation, Which Uses Throughput Costing, Began Operations at the Start

question 109

Essay

Coastal Corporation, which uses throughput costing, began operations at the start of the current year. Planned and actual production equaled 20,000 units, and sales totaled 17,500 units at $95 per unit. Cost data for the year were as follows: $\begin{array} { | l | r | } \hline \text { Direct materials (per unit) } & \text { \$ } 18 \\\hline \text { Conversion cost: } & \\\hline \text { Direct labor } & 160,000 \\\hline \text { Variable manufacturing overhead } & 280,000 \\\hline \text { Fixed manufacturing overhead } & 340,000 \\\hline \text { Selling and administrative costs (total) } & 430,000 \\\hline\end{array}$ The company classifies direct materials as a throughput cost.
Required:
A. Compute Coastal Corporation's total cost for the year.
B. How much of this cost would be held in year-end inventory under (1) absorption costing, (2) variable costing, and (3) throughput costing?
C. How much of Coastal Corporation's total cost for the year would appear on the period's income statement under (1) absorption costing, (2) variable costing, and (3) throughput costing?
D. Compute the year's throughput-costing net income.

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Definitions:

Dyadic Leader-Member Relations

The interactional pattern and relationship quality between a leader and each individual member within a team or organization.

Real-World Organisations

Entities operating in society that perform functions or provide services, including businesses, government agencies, non-profits, and other structured groups.

Psychological Benefits

Refers to the positive effects on a person's mental health and well-being that result from certain activities, therapies, or situations.

Leader-Member Exchange Theory

A theory focusing on the two-way relationship (dyadic relationships) between leaders and followers, emphasizing the mutual benefits derived from high-quality exchanges.