Inventory Valuation under Absorption Costing and Variable CostingAt the end of the first year of operations, 6,200 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows:Direct materials$30.10 Direct labor18.40 Fixed factory overhead5.70 Variable factory overhead5.00 Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept.Absorption costing$fill in the blank 1Variable costing$fill in the blank 2

Absorption costing is a accounting method for recording all costs associated with manufacturing…

Answered: Inventory Valuation under Absorption…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Inventory Valuation under Absorption Costing and Variable Costing

At the end of the first year of operations, 6,200 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows:

Direct materials	$30.10
Direct labor	18.40
Fixed factory overhead	5.70
Variable factory overhead	5.00

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
Variable costing	$fill in the blank 2

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