Mobile, Inc. manufactured 700 units of a new product A during the year. The variable cost of product A was $ 5.00 and the fixed cost per unit $ 2.00. The inventory at the end of the year, on December 31, was 100 units. There was no inventory of the product at the beginning of the year. What would be the change in inventory in dollars as of December 31 if we used the variable cost system instead of the absorption cost system?

Mobile, Inc. manufactured 700 units of a new product A during the year. The variable cost of product A was $ 5.00 and the fixed cost per unit $ 2.00. The inventory at the end of the year, on December 31, was 100 units. There was no inventory of the product at the beginning of the year. What would be the change in inventory in dollars as of December 31 if we used the variable cost system instead of the absorption cost system?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 6E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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