Makin & Byrd Inc., which uses throughputcosting, just completed its first year ofoperations. Planned and actual productionequaled 10,000 units, and sales totaled 9,600 units at $80 perunit. Cost data for the year are as follows:
Direct material(per unit)...... $12
Conversion Cost:
DirectLabor.........................45,000
Variable ManufacturingOverhead...65,000
Fixed ManufacturingOverhead....220,000
Selling & Administrative Costs:
Variable (perunit)............8
Fixed.................................118,000
The company classifies only direct material asa throughput cost.
a.) Compute the company's total cost for the year assuming thatvariable manufacturing costs are driven by the number of unitsproduced and that variable selling and administration costs aredriven by the number of units sold.
b.) How much of this cost would be held in year-end inventory under (1)absorption costing, (2) variable costing, (3) throughputcosting?
c.) How much of the company's total cost for the year would beincluded as an expense on the period's income statement under(1) absorption costing, (2) variable costing, (3) throughputcosting?
d.) Prepare the company's throughput-costing incomestatement.