PFA Corporation uses a throughput costing system and reported the following information for its first month of operations: Units produced 140
Units sold 120
Material cost per unit produced $3.50
Conversion cost per unit produced $6.50
Fixed period costs per unit produced $6.00
Variable period costs per unit produced $4.00
Selling price per unit $25.00
PFA's throughput ending inventory was:
A)$70
B)$200
C)$0
D)$490

Question

Quizplus · Accepted Answer

Throughput costing only considers direct material costs for inventory valuation. Ending inventory is 20 units (140 produced - 120 sold) at $3.50 material cost per unit, totaling $70.

PFA Corporation Uses a Throughput Costing System and Reported the Following