Simila Corporation has provided the following data for its most recent year of o

Question

Simila Corporation has provided the following data for its most recent year of operation Manufacturing costs: Variable manufacturing cost per unit produced Direct materials $11 Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year $308,008 Selling and administrative expenses: Variable selling and administrative expense per unit sold Fixed selling and administrative expense per year 81,000 Units in beginning inventory Units produced during the year Units sold during the year Units in ending inventory 11,000 9,000 2,000 Which of the following statements is true?

Explanation / Answer

Answer: The amount of fixed manufacturing overhead deferred in inventories is $56,000.

Fixed manufacturing overhead per unit = $308000/11000 units = $28 per unit

Fixed manufacturing overhead in ending inventory = $28 x 2000 units = $56,000

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