variable cost

 

 Variable Costing

XM Outfitters produces Kayaks. Download this Excel spreadsheet which contains information for the first three years of business and use it to present your calculations and answers to the questions below:

  • Calculate profit and the value of ending inventory for each year using full costing.
  • Explain why profit fluctuates from year to year even though the units sold and selling price remains the same.
  • Calculate profit and the value of ending inventory for each year using variable costing.
    • Explain why when using variable costing profit does not fluctuate from year to year.
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