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Question 4. During its first year of operations, Connor Company paid $50,000 for direct materials and $36,000 in wages for pr
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Answer #1

Direct material = $50,000

Direct labor = $36,000

Lease payment and utilities for production = $14,000

General, selling and administrative expense = $16,000

Total production cost = Direct material + Direct labor + Lease payment and utilities for production

= 50,000 + 36,000 + 14,000

= $100,000

Number of units produced = 5,000

Production cost per unit = Total production cost/Number of units produced

= 100,000/5,000

= $20

Number of units sold = 4,000

Ending inventory = Number of units produced - Number of units sold

= 5,000 - 4,000

= 1,000

Cost of finished goods inventory = Production cost per unit x Ending inventory

= 20 x 1,000

= $20,000

Correct option is (C)

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