Truman Corporation The following information has been extracted from the financial records of Truman Corporation for its first year of operations:

Units produced 10,000

Units sold 7,000

Variable costs per unit:

Direct material $8

Direct labor 9

Manufacturing overhead 3

SG&A 4

Fixed costs:

Manufacturing overhead $70,000

SG&A 30,000

Refer to Truman Corporation.Based on absorption costing,the Cost of Goods Manufactured for Truman Corporation's first year would be A)$200,000. B)$270,000. C)$300,000. D)$210,000.

Question

Truman Corporation The following information has been extracted from the financial records of Truman Corporation for its first year of operations:

Units produced	10,000
Units sold	7,000
Variable costs per unit:
Direct material	$8
Direct labor	9
Manufacturing overhead	3
SG&A	4
Fixed costs:
Manufacturing overhead	$70,000
SG&A	30,000

Refer to Truman Corporation.Based on absorption costing,the Cost of Goods Manufactured for Truman Corporation's first year would be A)$200,000. B)$270,000. C)$300,000. D)$210,000.

Quizplus · Accepted Answer

The Cost of Goods Manufactured (COGM) under absorption costing includes all manufacturing costs (both variable and fixed). The calculation is as follows: Variable costs per unit = $8 (Direct Material) + $9 (Direct Labor) + $3 (Manufacturing Overhead) = $20 per unit. Total variable manufacturing costs = 10,000 units * $20 = $200,000. Add fixed manufacturing overhead = $70,000. Therefore, COGM = $200,000 + $70,000 = $270,000.

Truman Corporation The Following Information Has Been Extracted from the Financial Records