Carr Company produces a single product. During the past year, Carr manufactured
ID: 2467828 • Letter: C
Question
Carr Company produces a single product. During the past year, Carr manufactured 43,000 units and sold 29,000 units. Production costs for the year were as follows: Fixed manufacturing overhead $ 430,000 Variable manufacturing overhead $ 548,250 Direct labor $ 361,200 Direct materials $ 464,400 Sales totaled $2,233,000, variable selling expenses totaled $438,600, and fixed selling and administrative expenses totaled $188,000. There were no units in beginning inventory. Assume that direct labor is a variable cost. Under absorption costing, the ending inventory for the year would be valued at (Do not round y
Explanation / Answer
Units Manufactured 43000 Units Sold 29000 Per Unit Direct Material 464000 10.8 464000/43000) Direct Labor 361200 8.4 (361200/43000) Variable Manufacturing 548250 12.75 (548250/43000) Fixed Manufacturing O/H 430000 10 (430000/43000) Fixed Selling I& Admin 188000 6.48 ( 188000/29000) Total 48.43 Ending Inventory 43000-29000 14000 Cost 14000*48.43 678020 The ending inventory will cost $ 678020