Inventory Valuation under Absorption Costing and Variable CostingAt the end of the first year of operations, 5,700 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows:Direct materials$34.60 Direct labor13.20 Fixed factory overhead5.70 Variable factory overhead5.00 Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept.Absorption costing$Variable costing$

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Description: Inventory Valuation under Absorption Costing and Variable CostingAt the end of the first year of operations, 5,700 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows:Direct materials$34.60 Dir

Variable Costing: The variable costing is the method of costing in which only the variable…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Inventory Valuation under Absorption Costing and Variable Costing

At the end of the first year of operations, 5,700 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows:

Direct materials	$34.60
Direct labor	13.20
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	$
Variable costing	$

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