A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (10,000 units):       Direct materials $80,000     Direct labor 120,000     Variable factory overhead 140,000     Fixed factory overhead 40,000 $380,000 Operating expenses:       Variable operating expenses $65,000     Fixed operating expenses 25,000 90,000 If 1,000 units remain unsold at the end of the month, the amount of inventory that would be reported on the absorption costing balance sheet is a.$47,000 b.$38,000 c.$40,500 d.$34,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A business operated at 100% of capacity during its first month and incurred the following costs:

Production costs (10,000 units):    
  Direct materials $80,000  
  Direct labor 120,000  
  Variable factory overhead 140,000  
  Fixed factory overhead 40,000 $380,000
Operating expenses:    
  Variable operating expenses $65,000  
  Fixed operating expenses 25,000 90,000

If 1,000 units remain unsold at the end of the month, the amount of inventory that would be reported on the absorption costing balance sheet is

a.$47,000
b.$38,000
c.$40,500
d.$34,000
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