HairNeat Inc. manufactures hair brushes that sell at wholesale for $2.60 per unit. Budgeted production in both 2016 and 2017 was 3,000 units. There was no beginning inventory in 2016. The following data summarized the 2016 and 2017 operations:     2016 2017 Units sold 2,500 3,200 Units produced 3,000 3,000 Costs:     Variable manufacturing costs per unit $0.65 $0.65 Fixed factory overhead $1,290 $1,290 Variable marketing per unit $0.80 $0.80 Fixed Selling and Administrative $650 $650   What is the value of closing inventory in 2016 under absorption costing? Question 9 options:   1)  $325   2)  $540   3)  $195   4)  $324

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Question

HairNeat Inc. manufactures hair brushes that sell at wholesale for $2.60 per unit. Budgeted production in both 2016 and 2017 was 3,000 units. There was no beginning inventory in 2016. The following data summarized the 2016 and 2017 operations:
 

  2016 2017
Units sold 2,500 3,200
Units produced 3,000 3,000
Costs:    
Variable manufacturing costs per unit $0.65 $0.65
Fixed factory overhead $1,290 $1,290
Variable marketing per unit $0.80 $0.80
Fixed Selling and Administrative $650 $650


 
What is the value of closing inventory in 2016 under absorption costing?

Question 9 options:

 

1) 

$325
 

2) 

$540
 

3) 

$195
 

4) 

$324

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