Abile Company produced 15,000 units during its first year of operations and sold 13,800 at $22 per
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Abile Company produced 15,000 units during its first year of operations and sold 13,800 at $22 per unit. The company chose practical activity—at 15,000 units—to compute its predetermined overhead rate. Manufacturing costs are as follows:
Direct materials ......$ 79,500
Direct labor .......105,000
Variable overhead .....15,900
Fixed overhead ......51,000
Required:
1. Calculate the unit cost for each of these four costs.
2. Calculate the cost of one unit of product under absorption costing.
3. How many units are in ending inventory?
4. Calculate the cost of ending inventory under absorption costing.
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
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Related Book For
Cornerstones of Managerial Accounting
ISBN: 978-0324660135
3rd Edition
Authors: Mowen, Hansen, Heitger
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