Trio Company reports the following information for the current year, which is it
ID: 2453573 • Letter: T
Question
Trio Company reports the following information for the current year, which is its first year of operations.
$16 per unit
Overhead costs for the year
Variable Overhead
Fixed Overhead
$80,000 per year
$160,000 per year
20,000 units
1. Compute the cost per unit using absorption costing.(check #1 - Absorption cost per unit, #43)
2. Determine the cost of ending finished goods inventory using absorption costing.
3. Determine the cost of goods sold using absorption costing.
Direct Materials $15 per unit Direct Labor$16 per unit
Overhead costs for the year
Variable Overhead
Fixed Overhead
$80,000 per year
$160,000 per year
Units Produced this year20,000 units
Units Sold This year 14,000 units Ending Finished Goods Inventory this year 6,000 unitsExplanation / Answer
Total cost=20,000*15+20,000*16+$80,000+$160,000=$860,000
Total units prodused =20,000
So absorption cost per unit=$860,000/20,000=$43
Finished Goods=6,000*$43=$258,000
Cost of goods sold=14,000*$43=$602,000
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