Inventory Valuation under Absorption Costing and Variable Costing At the end of the first year of...

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Inventory Valuation under Absorption Costing and Variable Costing At the end of the first year of...

Inventory Valuation under Absorption Costing and Variable Costing

At the end of the first year of operations, 5,400 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows:

Direct materials	$38.00
Direct labor	14.40
Fixed factory overhead	6.10
Variable factory overhead	5.40

Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept.

Absorption costing	$
Variable costing	$

business accounting

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Answer 1

Answer #1

Determine the cost of the finished goods inventory reported on the balance sheet

Absorption costing (63.9*5400)	345060
Variable costing (57.8*5400)	312120

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Answer 2

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