X Company Reported Operating Income for Year 2 of $1,200,000

question 4

Essay

X Company reported operating income for Year 2 of $1,200,000 under variable costing and $1,600,000 under absorption costing.The total variable manufacturing cost of the company's ending finished goods inventory was $120,000.The cost of the company's beginning-of-year finished goods inventory under absorption costing was $50,000 higher than the cost of the beginning-of-year finished goods inventory under variable costing.
Required:
a)Calculate the cost of ending finished goods inventory under absorption costing.
b)Compare the cost of your ending finished inventory under absorption costing in part (a)with that given under variable costing.Does the difference make sense? Why or why not?

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Definitions:

Higher-intensity Exercise

Physical activity performed at a vigorous effort level, significantly elevating heart rate and enhancing cardiorespiratory fitness.

Total Calories

The overall amount of energy, measured in calories, provided by the consumption of food and drink.

Total Fat

Refers to the sum of all the different types of fat in a food or diet, including saturated, unsaturated, and trans fats.

Cross Training

A training routine that involves several different types of exercise to improve overall performance.