How much fixed overhead is in ending inventory under absorption costing?
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A manufacturer reports the following costs to produce 24,000 units in its first year of operations: Direct materials, $24 per unit, Direct labor, $20 per unit, Variable overhead, $216,000, and Fixed overhead, $288,000. Of the 24,000 units produced, 23,200 were sold, and 800 remain in inventory at year-end. Under absorption costing, the value of the inventory is: Multiple Choice $35,200. $42,400. $52,000. $44,800. $26,400.
Akash M.
During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $4 per unit, Direct labor, $2 per unit, Variable overhead, $3 per unit, and Fixed overhead, $256,000. The company produced 32,000 units, and sold 26,500 units, leaving 5,500 units in inventory at year-end. What is the value of ending inventory under absorption costing
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Acme Company produces a single product. During the current year, Acme produced 8,000 units and sold 6,200 units. There were no units in beginning inventory. Acme's total variable manufacturing costs were $680,000 and its total fixed manufacturing overhead costs were $1,000,000. Which of the following statements is true? • The cost of the items in ending inventory is $210 per unit under variable costing. • Ending inventory is $153,000 lower under variable costing than under absorption costing. • The cost of the items in ending inventory is $125 per unit under absorption costing. • Operating income is $225,000 higher under absorption costing than under variable costing • None of the above statements is true.
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