help please Thanks EX 20-1 Inventory valuation under absorption costing and vari

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EX 20-1 Inventory valuation under absorption costing and variable costing Obj. 1 ventory, 780,800 At the end of the first year of operations, 6,400 units remained in the finished goods inventory The unit manufacturing costs during the year were as follows: Direct materials Direct labor Fixed factory overhead Variable factory overhead $75 35 15 12 Determine the cost of the finished goods inventory reported on the balance sheet unde A the absorption costing concept and (B) the variable costing concept.

Explanation / Answer

Calculate cost of finished goods inventory under absorption costing :

Calculate cost of finished goods inventory under variable costing :

Direct material 75 Direct labour 35 Fixed factory overhead 15 Variable factory overhead 12 Unit product cost under absorption costing 137 Ending inventory unit 6400 Cost of finished goods inventory 876800

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