Chapter 14, Problem 65P

Abigail Designs Ltd. produces a single product. Variable production costs are $18 per unit, and variable selling and administrative expenses are $6 per unit. Fixed manufacturing overhead totals $50,000, and fixed selling and administration expenses total $48,000. Assuming a beginning inventory of zero, production of 6,000 units and sales of 5,400 units, the dollar value of the ending inventory under variable costing would be: a.$9,000 b. $10,800 c. $12,000 d. $15,600

Benson Corporation applies manufacturing overhead on the basis of direct labor hours. At the beginning of the most recent year, the company based its predetermined overhead rate on a total estimated overhead of $102,000 and 4,000estimated direct labor hours. Actual manufacturing overhead for the year amounted to $105,600 and actual direct labor hours were 3,900. The applied manufacturing overhead for the year was closest to _.

Accounting solution and correct