The Southern Corporation manufactures a single product and has the following cost structure: Variable costs per...

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The Southern Corporation manufactures a single product and has the following cost structure: Variable costs per unit: Product

business accounting

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Answer 1

Answer #1

Correct answer will be

$2700 higher than under variable costing

Working Note

Fixed Cost per Unit: (170100/6300)= $27

Variale Product cost per Unit= $34

Total Cost of Production (27+34)= $61

Total Cost of ending inventory as per Absortion costing
(6300-6200)X 61=$6100

Total Cost of ending inventory as per Variable costing
(6300-6200)X 34=$3400

Cost of Ending Inventory is higher by ( 6100-3400)=$2700 under absorption costing

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Answer 2

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