Chapter 21, Problem 2CMA

Chassen Company, a cracker and cookie manufacturer, has the following unit costs for the month of June:

A total of 100,000 units were manufactured during June, of which 10,000 remain in ending inventory. Chassen uses the first-in, first-out (FIFO) inventory method, and the 10,000 units are the only finished goods inventory at June 30. Under the absorption costing concept, the value of Chassen’s June 30 finished goods inventory would be:

1. a. $50,000.
2. b. $70,000.
3. c. $85,000.
4. d. $145,000.