Meow Foods had 2,000 25-pound bags of cat food in beginning inventory. During 2020, the company manufactured 16,000 bags and sold 15,000 units. Assume the same unit costs in all years. Each bag of food is sold for $17. The company experienced the following costs:
Meow Foods had 2,000 25-pound bags of cat food in beginning inventory. During 2020, the company manufactured 16,000 bags and sold 15,000 units. Assume the same unit costs in all years. Each bag of food is sold for $17. The company experienced the following costs:
Direct materials $5.00 per unit
Direct labor $2.10 per unit
Variable manufacturing
Variable selling $1.00 per unit
Fixed manufacturing overhead $48,000
Fixed selling $24,000
Fixed administrative $30,000
If the company uses variable costing, how much will be reported as inventory on the December 31, 2020, balance sheet?
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$27,000 |
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$30,000
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$28,500 |
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$34,500 |
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