Kern Corporation produces a single product. Selected information concerning the operations of the company follow: Units in beginning inventory 0 Units produced 10,000 Units sold 9,000 Direct materials $ 40,000 Direct labor $ 20,000 Variable manufacturing overhead $ 12,000 Fixed manufacturing overhead $ 25,000 Variable selling and administrative expenses $ 4,500 Fixed selling and administrative expenses $ 30,000 Assume that direct labor is a variable cost. Under absorption costing, the value of the ending finished goods inventory would be: $7,200 $9,700 $7,650 $8,000
Kern Corporation produces a single product. Selected information concerning the operations of the company follow: Units in beginning inventory 0 Units produced 10,000 Units sold 9,000 Direct materials $ 40,000 Direct labor $ 20,000 Variable manufacturing overhead $ 12,000 Fixed manufacturing overhead $ 25,000 Variable selling and administrative expenses $ 4,500 Fixed selling and administrative expenses $ 30,000 Assume that direct labor is a variable cost. Under absorption costing, the value of the ending finished goods inventory would be: $7,200 $9,700 $7,650 $8,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kern Corporation produces a single product. Selected information concerning the operations of the company follow:
Assume that direct labor is a variable cost.
Under absorption costing, the value of the ending finished goods inventory would be:
| Units in beginning inventory | 0 |
| Units produced | 10,000 |
| Units sold | 9,000 |
| Direct materials | $ | 40,000 |
| Direct labor | $ | 20,000 |
| Variable manufacturing |
$ | 12,000 |
| Fixed manufacturing overhead | $ | 25,000 |
| Variable selling and administrative expenses | $ | 4,500 |
| Fixed selling and administrative expenses | $ | 30,000 |
Assume that direct labor is a variable cost.
Under absorption costing, the value of the ending finished goods inventory would be:
|
$7,200
|
||
|
$9,700
|
||
|
$7,650
|
||
|
$8,000
|
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