Verst Products Co. uses a process cost system and applies actual factory overhead to work in process

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Verst Products Co. uses a process cost system and applies actual factory overhead to work in process at the end of the month. The following data came from the records for March:

Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ $200,000

Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000

Variable factory overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... $ 80,000

Fixed factory overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...$ 60,000

Selling and administrative expenses . . . . . . . . . . . . . . . . . . . . . . ....$ 40,000

Units produced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000

Units sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000

Selling price per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 25

There were no beginning inventories and no ending work in process inventory. From the information presented, compute the following:

1. Unit cost of production under absorption costing and variable costing.

2. Cost of the ending inventory under absorption costing and variable costing.


Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...
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Principles of Cost Accounting

ISBN: 978-1133187868

16th edition

Authors: Edward J. Vanderbeck

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