Pinnacle Corporation reports the following information for the current year, which is its first year of operations: Direct materials Direct labor Overhead costs for the year: Variable overhead - Fixed overhead Units produced this year Units sold this year $16 per unit $20 per unit $3 per unit $90,000 per year 18,000 units 12,000 units Ending finished goods inventory 6,000 units Requirements: 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.

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...
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Pinnacle Corporation reports the following information for the current year.

Pinnacle Corporation reports the following information for the current year, which is its
first year of operations:
Direct materials
Direct labor
Overhead costs for the year:
Variable overhead
- Fixed overhead
Units produced this year
Units sold this year
$16 per unit
$20 per unit
$3 per unit
$90,000 per year
18,000 units
12,000 units
Ending finished goods inventory 6,000 units
Requirements:
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.
Transcribed Image Text:Pinnacle Corporation reports the following information for the current year, which is its first year of operations: Direct materials Direct labor Overhead costs for the year: Variable overhead - Fixed overhead Units produced this year Units sold this year $16 per unit $20 per unit $3 per unit $90,000 per year 18,000 units 12,000 units Ending finished goods inventory 6,000 units Requirements: 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.
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