Jake Ltd makes and sells a single product X. The following information for the quarter ended March 2023 is available:

	January	February	March
Units Produced	900	875	875
Units Sold	650	825	850

The various costs per unit of X based on budgeted production and sales of 1,000 units per month is provided below.

Product	X
	$per unit
Seling price per unit	400
Variable costs per unit
Direct Material	30
Direct Labour	40
Manufacturing Overhead	30
Selling and distribution	10
Budgeted Fixed costs per month
Manufacturing Overhead	150,000
Selling and distribution	50,000

There were no beginning inventories in January and the actual fixed costs were as budgeted. Selling price and all other costs were stable throughout the quarter. What was the closing inventory valuation in February based on absorption costing principles?

A. $72,000

B.$87,000

C.$75,000

D.$27,000

Answer rating: 100% (QA)

Opening Inventory for January Nil Units produced during January 900 Units Uni... View the full answer