Mackenzie,Inc.has collected the following data.(There are no beginning inventories.) $$\begin{array} { | l | r | c | }
\hline \text { Units produced } & 600 & \text { units } \
\hline \text { Sales price } & \$ 120 & \text { per unit } \
\hline \text { Direct materials } & \$ 20 & \text { per unit } \
\hline \text { Direct labor } & \$ 12 & \text { per unit } \
\hline \text { Variable manufacturing overhead } & \$ 6 & \text { per unit } \
\hline \text { Fixed manufacturing overhead } & \$ 17,400 & \text { per year } \
\hline \text { Variable selling and administrative costs } & \$ 5 & \text { per unit } \
\hline \text { Fixed selling and administrative costs } & \$ 13,700 & \text { per year } \
\hline
\end{array}$$ What is the ending balance in Finished Goods Inventory using absorption costing if 550 units are sold? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

Question

Mackenzie,Inc.has collected the following data.(There are no beginning inventories.) $$\begin{array} { | l | r | c | } 
\hline \text { Units produced } & 600 & \text { units } \
\hline \text { Sales price } & \$ 120 & \text { per unit } \
\hline \text { Direct materials } & \$ 20 & \text { per unit } \
\hline \text { Direct labor } & \$ 12 & \text { per unit } \
\hline \text { Variable manufacturing overhead } & \$ 6 & \text { per unit } \
\hline \text { Fixed manufacturing overhead } & \$ 17,400 & \text { per year } \
\hline \text { Variable selling and administrative costs } & \$ 5 & \text { per unit } \
\hline \text { Fixed selling and administrative costs } & \$ 13,700 & \text { per year } \
\hline
\end{array}$$ What is the ending balance in Finished Goods Inventory using absorption costing if 550 units are sold? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

Quizplus · Accepted Answer

Under absorption costing, the cost per unit includes direct materials, direct labor, variable manufacturing overhead, and a portion of fixed manufacturing overhead. The cost per unit is $20 + $12 + $6 + ($17,400 / 600) = $67. The ending inventory is 50 units (600 produced - 550 sold), so the ending balance is 50 units * $67 = $3350.

Mackenzie,Inc What Is the Ending Balance in Finished Goods Inventory Using