QS $19-8$

Computing inventory under absorption and variable costing

P$2$

A manufacturer has $100$ units in finished goods inventory at the end of the year. Using the per unit information below, compute the cost of finished goods

inventory reported on the balance sheet under $($a$)$ absorption costing and $($b$)$ variable costing.

Direct materials

$$20$ per unit

Direct labor.

$$12$ per unit

OS $19-9$