Under absorption costing, the value of the ending finished goods inventory would be:
A)$7,200
B)$7,650
C)$8,000
D)$9,700

Question

Quizplus · Accepted Answer

Units in ending inventory = Units in beginning inventory + Units produced - Units sold
= 0 units + 10,000 units - 9,000 units = 1,000 units 11ea7998_5ddc_4cf8_911b_5db7168db1ba_TB2627_00_TB2627_00 Absorption costing unit product cost = $97,000 ÷ 10,000 units = $9.70 per unit
Ending finished goods inventory = $9.70 per unit × 1,000 units = $9,700

Under Absorption Costing, the Value of the Ending Finished Goods