Question

g sells its product for $60 per unit. During 2019, it produced 48000 units and sold 40000 units (there was no beginning inventory). Costs per unit are: direct materials $15, direct labor $9, and variable overhead $3. Fixed costs are: $576000 manufacturing overhead, and $72000 selling and administrative expenses. Under absorption costing, what amount of fixed overhead is deferred to a future period?

Answer 1

Fixed overhead allocated to ending inventory= $96,000

Step-by-step explanation:

Giving the following information:

Production= 48,000

Sales= 40,000

Fixed manufacturing overhead= $576,000

First, we need to calculate the unitary fixed manufacturing overhead:

Unitary fixed manufacturing overhead= 576,000/48,000= $12

Fixed overhead allocated to ending inventory= 12*8,000= $96,000