Question

Covington BBQ produces stainless steel propane gas grills. The company has been in operation for three years, and sales have declined each year due to increased competition. The following information is available: 2020 2021 2022 Total Units sold 27.000 23,900 25,600 76,500 Units produced 27,000 27.000 22,500 76,500 Fixed production costs $27,000,000 $27,000,000 $27,000,000 Variable production costs per unit $1.000 $1,000 $1.000 Selling price per unit $2,500 $2,500 $2,500 Fixed selling and administrative expense $3,700,000 $3,700,000 $3,700,000 ро Calculate profit and the value of ending inventory for each year under full costing. (Round cost per unit and final ansu decimal places, e... 15.) 2020 2021 2022 $ $ Net profit Ending inventory $ $ eTextbook and Media Calculate profit and the value of ending Inventory for each year under variable costing. 2020 2021 2022 Net profit $ 5 Ending Inventory $ S

Answer 1

Calculation of Closing inventory units 2020 2021 2022 Opening 이 이 3100 27000 27000 22500 Add Produced Less sold Closing -27000 (23,900) 3100 (25,600) 0 0

2020 2021 2022 Full cost approach Units sold Selling price per unit 27,000 2,500 $ 23,900 2,500 $ 25,600 2,500 $ Sales value $67,500,000 $59,750,000 $ 64,000,000 Less Variable cost @ $1,000 per unit Less @ $ 1,000 per unit $27,000,000 $23,900,000 $25,600,000 $27,000,000 $23,900,000 $25,600,000 $13,500,000 $11,950,000 $12,800,000 Gross margin Less Fixed selling and Administrative expense Net profit Value of closing stock @ (Variable + $ 3,700,000 $ 3,700,000 $ 3,700,000 $ 9,800,000 $ 8,250,000 $ 9,100,000 Closing stock Ending inventory $ 3,100 $ 6,200,000 $ $

2020 2021 2022 27,000 23,900 25,600 $ 2,500 $ 2,500 $ 2,500 $ 1,000 $ 1,000 $ 1,000 $ 1,500 $ 1,500 $ 1,500 $ 40,500,000 $35,850,000 $38,400,000 Variable costing Approach Units sold Selling price per unit Less Variable cost per unit Contribution Total contribution Less Fixed production cost Fixed selling and Administrative expense Net profit cost per unit i.e. $1000 $27,000,000 $27,000,000 $27,000,000 $ 3,700,000 $ 3,700,000 $ 3,700,000 $ 9,800,000 $ 5,150,000 $ 7,700,000 Closing stock Ending inventory $ 3,100 $ 3,100,000 $ $

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