Perla Industries produced 30,000 units and sold 29,000 units in 2025 with no beginning inventory. During the year, the following costs were incurred: Calculate the ending inventory balance using both absorption costing and variable costing. Which method would you recommend Perla use for external purposes? Which method should be used to evaluate the managers of the company? Be sure to state your reason why.

Question

Perla Industries produced 30,000 units and sold 29,000 units in 2025 with no beginning inventory. During the year, the following costs were incurred:  Calculate the ending inventory balance using both absorption costing and variable costing. Which method would you recommend Perla use for external purposes? Which method should be used to evaluate the managers of the company? Be sure to state your reason why.

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The Answer of Perla Industries produced 30,000 units and sold 29,000 units in 2025 with no beginning inventory. During the year, the following costs were incurred:  Calculate the ending inventory balance using both absorption costing and variable costing. Which method would you recommend Perla use for external purposes? Which method should be used to evaluate the managers of the company? Be sure to state your reason why.

Perla Industries Produced 30,000 Units and Sold 29,000 Units in 2025