Question

Carr Company produces a single product. During the past year, Carr manufactured 32,210 units and sold 26,700 units. Production costs for the year were as follows: Direct materials $241,575 Direct labor $157,829 Variable manufacturing overhead $251,238 Fixed manufacturing overhead $418,730 Sales were $1,241,550 for the year, variable selling and administrative expenses were $138,840, and fixed selling and administrative expenses were $199,702. There was no beginning inventory. Assume that direct labor is a variable cost. Under absorption costing, the ending inventory for the year would be valued at: (Do not round intermediate calculations.) $182,932 $252,932 $210,432 $244,432

Answer 1

Ending inventory= $189,932

Step-by-step explanation:

Giving the following information:

Carr manufactured 32,210 units and sold 26,700 units.

Direct materials $241,575

Direct labor $157,829

Variable manufacturing overhead $251,238

Fixed manufacturing overhead $418,730

Total cost= $1,069,372

The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

First, we need to determine the unitary production cost:

Unitary production cost= 1,069,372/32,210= $33.2

Units in ending inventory= 32,210 - 26,700= 5,510

Now, the value of ending inventory:

Ending inventory= 33.2*5,510= $189,932