Bella Ltd has operated for 2 years. During that time it produced 1,000 units in year 1 and 800 in year 2, while sales were 800 units in year 1 and 900 in year 2. Variable production costs were $8 per unit during both years. The company uses last-in, first-out (LIFO) for inventory costing. The absorption costing income statements for these 2 years were: Cost of goods sold for year 1 using variable costing would be
A) $6,400
B) $8,800
C) $8,000
D) $7,600

Question

Bella Ltd has operated for 2 years. During that time it produced 1,000 units in year 1 and 800 in year 2, while sales were 800 units in year 1 and 900 in year 2. Variable production costs were $8 per unit during both years. The company uses last-in, first-out (LIFO) for inventory costing. The absorption costing income statements for these 2 years were:  Cost of goods sold for year 1 using variable costing would be
A) $6,400 
B) $8,800 
C) $8,000 
D) $7,600

Quizplus · Accepted Answer

The Answer of Bella Ltd has operated for 2 years. During that time it produced 1,000 units in year 1 and 800 in year 2, while sales were 800 units in year 1 and 900 in year 2. Variable production costs were $8 per unit during both years. The company uses last-in, first-out (LIFO) for inventory costing. The absorption costing income statements for these 2 years were:  Cost of goods sold for year 1 using variable costing would be
A) $6,400 
B) $8,800 
C) $8,000 
D) $7,600

Bella Ltd Has Operated for 2 Years