Unit Costs, Inventory Valuation, Variable and Absorption Costing

Snyder Company produced 90,000 units during its first year of operations and sold 87,000 at $21.80 per unit. The company chose practical activityat 90,000 unitsto compute its predetermined overhead rate. Manufacturing costs are as follows:

Direct materials	$540,000
Direct labor	99,000
Expected and actual variable overhead	369,000
Expected and actual fixed overhead	468,000

Required:

If required, round unit cost answers to the nearest cent.

1. Calculate the unit cost and the cost of finished goods inventory under absorption costing.

Unit Cost	$
Cost of finished goods inventory	$

2. Calculate the unit cost and the cost of finished goods inventory under variable costing.

Unit Cost	$
Cost of finished goods inventory	$

3. What is the dollar amount that would be used to report the cost of finished goods inventory to external parties? $___________

Why? Because absorption costing is required for external reporting