The Following Data Relate to Ventura Company, a New Corporation

question 41

Essay

The following data relate to Ventura Company, a new corporation, during a period when the firm produced and sold 100,000 units and 90,000 units, respectively: $$\begin{array} { l r } \text { Direct materials used } & \$ 400,000 \\\text { Direct labor } & 200,000 \\\text { Fixed manufacturing overhead } & 250,000 \\\text { Variable manufacturing overhead } & 120,000 \\\text { Fixed selling and administrative expenses } & 300,000 \\\text { Variable selling and administrative expenses } & 45,000\end{array}$$
The company met its original planned production target of 100,000 units. There were no variances during the period, and the firm's selling price is $15 per unit.
Required:
A. What is the cost of Ventura's end-of-period finished-goods inventory under the variable-costing method?
B. Calculate the company's variable-costing income.
C. Calculate the company's absorption-costing income.

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Definitions:

Best Advantage

The optimal utilization of resources, strategies, or circumstances to achieve the greatest benefit or competitive edge.

Entire Organisation

Refers to the complete network or totality of a company, encompassing all its departments, employees, and operational units.

Team Satisfaction

The level of contentment and positive feeling among members of a team related to their group activities and achievements.

Imperfectly Competitive

A market structure characterized by a few sellers who have some control over the prices and are not price takers, unlike in perfect competition.