Nova Manufacturing reports the following information for its first year of operations: Direct materials: $22 per unit Direct labor: $15 per unit Overhead costs: ⚫ Variable overhead: $3 per unit ⚫ Fixed overhead: $120,000 per year Units produced: 30,000 units Units sold: 25,000 units Ending finished goods inventory: 5,000 units 1. Compute the product cost per unit using absorption costing. 2. Determine the cost of ending finished goods inventory using absorption costing. 3. Determine the cost of goods sold using absorption costing.

Nova Manufacturing reports the following information for its first year of operations: Direct materials: $22 per unit Direct labor: $15 per unit Overhead costs: ⚫ Variable overhead: $3 per unit ⚫ Fixed overhead: $120,000 per year Units produced: 30,000 units Units sold: 25,000 units Ending finished goods inventory: 5,000 units 1. Compute the product cost per unit using absorption costing. 2. Determine the cost of ending finished goods inventory using absorption costing. 3. Determine the cost of goods sold using absorption costing.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 1E: At the end of the first year of operations, 21,500 units remained in the finished goods inventory....

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