Mountain Air Company Business Analysis

mountain Air Company has the following selected data for the past year:

Units sold during year30,000

Units produced during year45,000

Units in ending inventory15,000

Variable manufacturing cost per unit$4.50

Fixed manufacturing overhead (in total)$20,250

Selling price per unit$12.00

Variable selling and administrative expense per unit$1.00

Fixed selling and administrative expenses (in total)$4,000

There were no units in beginning inventory.

Required:

1a. Prepare an income statement for last year using absorption costing.

1b. Calculate the value of the ending inventory using absorption costing.

1c. Prepare an income statement for last year using variable costing.

1d. Calculate the value of the ending inventory using variable costing.

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