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Req

QS $6-7($Algo$)$ Reporting inventory using absorption costing LO P$2$

Compute the cost of ending finished goods inventory reported on the balance sheet using absorption costing.

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Use the following information for the Quick Study below. $($Algo$)$

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Aces Incorporated, a manufacturer of tennis rackets, began operations this year. The company produced $6,550$ rackets and sold $5,180.$ Each racket was sold at a price of $$90.$ Fixed overhead costs are $$85,150$ per year, and fixed selling and administrative costs are $$66,400$ per year. The company also reports the following per unit variable costs for the year.

Direct materials

Direct labor

$$12$

Variable overhead

Variable selling and administrative expenses

$8$

$5$

QS $6-7($Algo$)$ Reporting inventory using absorption costing LO P$2$

Compute the cost of ending finished goods inventory reported on the balance sheet using absorption costing.

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