Burrito-Blast makes bean and cheese burritos that it sells to grocery stores. The burritos sell for $1 each. Burrito-Blast had beginning inventory of $20,000 on June 1 for 80,000 burritos. During June the company produced 500,000 burritos. June production costs are as follows:

-The company's June 30 ending inventory consists of 20,000 burritos. Assuming they use FIFO costing, what is the absorption cost per burrito for a burrito that is manufactured in June?

Question

Burrito-Blast makes bean and cheese burritos that it sells to grocery stores. The burritos sell for $1 each. Burrito-Blast had beginning inventory of $20,000 on June 1 for 80,000 burritos. During June the company produced 500,000 burritos. June production costs are as follows:

-The company's June 30 ending inventory consists of 20,000 burritos. Assuming they use FIFO costing, what is the absorption cost per burrito for a burrito that is manufactured in June?

Quizplus · Accepted Answer

Under the FIFO (First-In, First-Out) costing method, the cost of the earliest goods purchased or manufactured are the first to be recognized in determining the cost of goods sold. Therefore, the cost per burrito manufactured in June would reflect the most recent costs incurred by the company, which, according to the provided choices, is $0.28.

Burrito-Blast Makes Bean and Cheese Burritos That It Sells to Grocery