Question:
Eastwood Company has the following information for previous year.
Selling price $150 per unit
Variable production costs $40 per unit produced
Variable selling and admin. expenses $16 per unit sold
Fixed production costs $200,000
Fixed selling and admin. expenses $140,000
Units produced 10,000 units
Units sold 8,000 units
There were no beginning inventories.
a. What is the ending inventory for Eastwood using the absorption costing method?
b. What is the cost of ending inventory for Eastwood using the variable costing method?