Yankee Corporation Manufactures a Single Product

question 63

Multiple Choice

Yankee Corporation manufactures a single product.The company has the following cost structure: Last year, 4, 000 units were produced and 3, 500 units were sold.There were no beginning inventories. The carrying value on the balance sheet of the ending finished goods inventory under variable costing would be:

• A)the same as under absorption costing
• B)$1, 500 less than under absorption costing
• C)$2, 000 higher than under absorption costing
• D)$2, 000 less than under absorption costing

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Definitions:

Operating Capacity

The maximum output a company can produce under normal conditions.

Sales Increase

An uptick in the volume or value of products or services sold by a business over a given period.

Variability

How much scores differ from one another or, put another way, the amount of spread or dispersion in a set of scores.

Within-group Differences

Variability or disparities found within a single group's members rather than between different groups.