The following production data came from the records of Olympic Enterprises for the year ended December 31, 2016:
Materials....................................................... $480,000
Labor .............................................................. 260,000
Variable factory overhead................................. 44,000
Fixed factory overhead..................................... 36,800
During the year, 40,000 units were manufactured but only 35,000 units were sold. Determine the effect on inventory valuation by computing the following:
1. Total inventoriable costs and the cost of the 35,000 units sold and of the 5,000 units in the ending inventory, using variable costing.
2. Total inventoriable costs and the cost of the 35,000 units sold and of the 5,000 units in the ending inventory, using absorption costing.