Krepps Corporation produces a single product. Last year, Krepps manufactured 20,000 units and sold 15,000 units. Production costs for the year were as follows:
Direct materials | $ | 170,000 | |
Direct labor | $ | 110,000 | |
Variable manufacturing overhead | $ | 200,000 | |
Fixed manufacturing overhead | $ | 240,000 | |
Sales totaled $825,000 for the year, variable selling and administrative expenses totaled $108,000, and fixed selling and administrative expenses totaled $165,000. 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:
Multiple Choice
$0
$216,000
$248,250
$180,000
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