Inventory Valuation under Absorption Costing and Variable Costing

At the end of the first year of operations, $6,000$ units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows:

Determine the cost of the finished goods inventory reported on the balance sheet under $($a$)$ the absorption costing concept and $($b$)$ the variable costing concept.

Absorption costing

Variable costing :

Inventory Valuation under Absorption Costing and Variable Costing

At the end of the first year of operations, $6,000$ units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows:

Direct materials

$$35\mathrm{.}80$

Direct labor

$16\mathrm{.}60$

Fixed factory overhead

$5\mathrm{.}60$

Variable factory overhead

$4\mathrm{.}90$

Determine the cost of the finished goods inventory reported on the balance sheet under $($a$)$ the absorption costing concept and $($b$)$ the variable costing concept.

Absorption costing

Variable costing $