Question

Inventory Valuation under The reporting of the costs of manufactured products, normally direct materials, direct labor, and factory overhead, as product costs.Absorption Costing and The concept that considers the cost of products manufactured to be composed only of those manufacturing costs that increase or decrease as the volume of production rises or falls (direct materials, direct labor, and variable factory overhead).Variable Costing

At the end of the first year of operations, 6,200 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows:

Direct materials	$31.90
Direct labor	19.80
Fixed factory overhead	6.50
Variable factory overhead	5.70

Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept.

Answer 1