Costing Methods and Inventory Valuation The following information is available f
ID: 2581098 • Letter: C
Question
Costing Methods and Inventory Valuation The following information is available for Keller Corporation's new product line: 12 0 Selling price per unit Variable manufacturing costs per unit of production $ 8 Total annual fixed manufacturing costs Variable administrative costs per unit of production $ 3 Total annual fixed selling and administrative expenses $15,000 $ 15 $25,000 There was no inventory at the beginning of the year. During the year 12,500 units were produced and 10,000 units were sold. Required: (a)Determine the cost of ending inventory, assuming Keller uses variable costing, (b)Determine the cost of ending inventory, assuming Keller uses absorption costing. (AICPA adapted)Explanation / Answer
Answer to A
Answer to B
Particulars Amt Variable Manufacturing Cost 8 No of Units in stock(12500-10000) 2500 Ending Inventory 20000