Refer to the information given in the preceding problem for Skinny Dippers, Inc. Assume that the company has committed spending for direct labor and manufacturing overhead: direct material is the only unit-level production cost.
Required:
1. Compute the cost of Skinny Dippers’ year-end finished-goods inventory using throughput costing.
2. Prepare an income statement for 20x1 using throughput costing.
3. Briefly explain the difference between gross margin computed under absorption costing and gross margin computed under throughput costing.
4. Build a spreadsheet: Construct an Excel spreadsheet to solve requirement (2) above. Show how the solution will change if the following information changes: the selling price and direct-material cost per unit are $16.00 and $4.50, respectively.
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