Teninarow Industries manufactures headsets to make phones hands free. In 2011, the entity produced 20 000 units of which 16 000 were sold. The following costs were recorded for 2011.
Direct material .......................................$ 800 000
Direct labour ......................................... 400 000
Manufacturing overhead ...........................1 000 000
Selling expenses ..................................... 100 000
Administrative expenses ........................... 160 000
Required:
a. Identify the most appropriate costing system to value products for Teninarow Industries' financial reports.
b. Calculate the inventoriable product cost.
c. Comment on the usefulness of the inventoriable product cost for decision making.