At the end of the first year of operations, 6,100 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows: Line Item Description Cost Direct materials $32.10 Direct labor 13.40 Fixed factory overhead 6.80 Variable factory overhead 6.00 Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept. Absorption costing fill in the blank 1 of 2$ Variable costing fill in the blank 2 of 2$
At the end of the first year of operations, 6,100 units remained in the finished goods inventory. The unit
| Line Item Description | Cost |
|---|---|
| Direct materials | $32.10 |
| Direct labor | 13.40 |
| Fixed factory |
6.80 |
| Variable factory overhead | 6.00 |
Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept.
Absorption costing fill in the blank 1 of 2$
Variable costing fill in the blank 2 of 2$
Lets understand the basics.
There are two costing system are followed which are,
(1) Variable costing
(2) Absorption costing
In variable costing, product cost gets calculated by adding all the variable manufacturing costs..
On other hand in absorption costing, product cost gets calculated by adding all the variable as well as fixed manufacturing costs.
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