# MANAGERIAL ACCOUNTING PROBLEM \$\$\$\$\$\$\$

Problem 8-35
Variable-Costing and Absorption-Costing Income

Tenley Company produces and sells wooden pallets that are used for moving and stacking materials. The operating costs for the past year were as follows:

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During the year, Tenley produced 300,000 wooden pallets and sold 306,500 at \$9 each. Tenley had 11,300 pallets in beginning ﬁnished goods inventory; costs have not changed from last year to this year. An actual costing system is used for product costing.

1. What is the per-unit inventory cost that will be reported on Tenley’s balance sheet at the end of the year? How many units are in ending inventory? What is the total cost of ending inventory? Round the per unit amount to the nearest cent.

Per-unit inventory cost \$

Why?

4. Calculate variable-costing operating income.
\$  [removed]

5. Suppose that Tenley Company had sold 296,700 pallets during the year. What would absorption-costing operating income have been? Variable-costing income?

 Absorption costing income \$  [removed] Variable costing income \$  [removed]
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