Question

During fiscal year 2016, Munson Manufacturing made and sold vinyl siding. At the beginning of the year the company had 3, 800 units. During the year Munson made 892, 500 units and sold 887, 600 units. Each unit cost the company $2.18 to manufacture and each unit is sold for $4.22. At the end of the year, what amount will Munson report on its balance sheet for finished goods inventory?

A. $10,682
B. $36,714
C. $20,678
D. $18,966

Answer 1

correct option is D. $18,966

Step-by-step explanation:

given data

Beginning inventory = 3800 units

during year Units manufactured = 892500

unit sold = 887600 units

Cost of each unit = $2.18

sold each unit = $4.22

solution

we get here first Units available for sale that is

Units available for sale = Beginning inventory + Units manufactured

Units available for sale = 3800 + 892500

Units available for sale = 896300

Beginning inventory,units 3800

and now we get Finished goods inventory that is

Finished goods inventory = Units available for sale - Units sold

Finished goods inventory = 896300 - 887600

Finished goods inventory = 8700

so now Finished goods inventory balance is = Cost of each unit × Finished goods inventory

Finished goods inventory balance is = $2.18 × 8700

Finished goods inventory balance is $18966

so correct option is D. $18,966