Moskowitz Corporation has provided the following data for its two most recent ye

Question

Moskowitz Corporation has provided the following data for its two most recent years of operation: Selling price per unit 91 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials Direct labor Variable manufacturing overhead 13 3 Fixed manufacturing overhead per year $480,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold Fixed selling and administrative expense peryear $ 84,000 Units in Units produced during the year Units sold during the year Units in ending inventory Year 1 Year 2 0 3,000 12,000 10,000 9,000 10,000 3,000 3,000 beginning inventory

Explanation / Answer

Answer d. The amount of Fixed manufacturing overhead deferred in inventories is $24,000. Calculation of Cost per Unit: Year 1 Year 2 Units Produced          12,000          10,000 Variable Cost per Unit Direct Materials                  13                  13 Direct Labor                    7                    7 Variable MOH                    3                    3 Fixed MOH                  40                  48 Total Cost per Unit                  63                  71 Fixed MOH - Year 1 - $480,000 / 12,000 Units                  40 Year 2 - $480,000 / 10,000 Units                  48 Year 2 Units in Beginning Inventory            3,000 Beginning Inventory - Fixed MOH Share       120,000 Units in Beginning Inventory            3,000 Ending Inventory - Fixed MOH       144,000 Fixed MOH - Deferred in Inventories          24,000

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