1. Unit Costs, Inventory Valuation, Variable and Absorption Costing

   Snyder Company produced 92,500 units during its first year of operations and sold 88,150 at $22.02 per unit. The company chose practical activityat 92,500 unitsto compute its predetermined overhead rate. Manufacturing costs are as follows:

   Direct materials	$573,500
   Direct labor	72,150
   Expected and actual variable overhead	358,900
   Expected and actual fixed overhead	490,250

   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	$fill in the blank 1
   Cost of finished goods inventory	$fill in the blank 2

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

   Unit Cost	$fill in the blank 3
   Cost of finished goods inventory	$fill in the blank 4

   3. What is the dollar amount that would be used to report the cost of finished goods inventory to external parties? $fill in the blank 5

   Why?

   Because absorption costing is required for external reportingBecause absorption costing is a more accurate methodBecause absorption costing always results in higher net income