Weston Industries produces a single product. Last year, the company manufactured 40,000 units and sold 35,200 units. Production costs for the year were: Direct materials: $300,000 ⚫ Direct labor: $250,000 Variable manufacturing overhead: $400,000 Fixed manufacturing overhead: $800,000 Total sales revenue was $1,650,000, with variable selling and administrative expenses of $180,000 and fixed selling and administrative expenses of $250,000. Assume direct labor is a variable cost. What is the value of the ending inventory under the absorption costing method?

Weston Industries produces a single product. Last year, the company manufactured 40,000 units and sold 35,200 units. Production costs for the year were: Direct materials: $300,000 ⚫ Direct labor: $250,000 Variable manufacturing overhead: $400,000 Fixed manufacturing overhead: $800,000 Total sales revenue was $1,650,000, with variable selling and administrative expenses of $180,000 and fixed selling and administrative expenses of $250,000. Assume direct labor is a variable cost. What is the value of the ending inventory under the absorption costing method?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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