The Following Information Pertains to Malcolm Corporation for a Period

question 112

Essay

The following information pertains to Malcolm Corporation for a period:
$\begin{array}{|l|r|}\hline\text { Selling price per unit } & \$ 41 \\\hline \begin{array}{l}\text { Standard fixed manufacturing costs per } \\\text { unit }\end{array} & \$ 20 \\\hline \begin{array}{l}\text { Variable selling and administrative cost } \\\text { per unit }\end{array} & \$ 4 \\\hline \text { Fixed selling and administrative costs } & \$ 16,000 \\\hline \text { Beginning inventories: } & \\\hline \text { Units } &? \\\hline \text { Standard fixed manufacturing cost } & \$ 40,000 \\\hline \text { Standard variable manufacturing cost } &\$ 20,000 \\\hline \text { Units produced } &10,000 \text { units } \\\hline \text { Units sold } & 9,600 \text { units } \\\hline\end{array}$
a)Assume the unit standard costs data for the beginning and ending inventories remained constant during the period.What was the total standard cost of the ending inventory under absorption costing?
b)Ignoring the effects of income taxes,what is your best estimate of the difference in retained earnings at the end of the period under absorption costing and variable costing?

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Definitions:

British Pounds

The official currency of the United Kingdom, also known as GBP (Great British Pounds).

Expropriation

The act of a government taking privately owned property, typically for public use or in the public interest, with or without compensation.

Direct Investments

Investments made directly into a company or project, rather than through securities, stocks, or other indirect means.

Terrorist Activity

Violent acts intended to create fear, perpetrated for a religious, political, or ideological goal, often targeting civilians.