13-B3 Comparison of Variable Costing and Absorption CostingConsider the following information pertaining to a year’s operations of Youngstown Manufacturing:Units sold 1,400Units produced 1,600Direct labor $4,200Direct materials used 3,500Fixed manufacturing overhead 2,200Variable manufacturing overhead 300Selling and administrative expenses (all fixed) 700Beginning inventories 0Contribution margin 5,600Direct-material inventory, end 800There are no work-in-process inventories.1. What is the ending finished-goods inventory cost under absorption costing?2. What is the ending finished-goods inventory cost under variable costing?
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