Harris Corporation produces a single product.Last year,Harris manufactured 17,000 units and sold 13,000 units.Production costs for the year were as follows: Sales were $780,000 for the year,variable selling and administrative expenses were $88,400,and fixed selling and administrative expenses were $170,000.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:
A)$190,800
B)$170,000
C)$230,800
D)$0

Question

Harris Corporation produces a single product.Last year,Harris manufactured 17,000 units and sold 13,000 units.Production costs for the year were as follows:  Sales were $780,000 for the year,variable selling and administrative expenses were $88,400,and fixed selling and administrative expenses were $170,000.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:
A)$190,800 
B)$170,000 
C)$230,800 
D)$0

Quizplus · Accepted Answer

Units in ending inventory = Units in beginning inventory + Units produced - Units sold
= 0 + 17,000 units - 13,000 units = 4,000 units
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Harris Corporation Produces a Single Product