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1) Red Company had 6,400 units remaining in their finished goods inventory. The unit manufacturing costs...

1) Red Company had 6,400 units remaining in their finished goods inventory. The unit manufacturing costs during the year were as follows: (10 points) Direct materials $84 Direct labor $32 Fixed factory overhead $14 Variable factory overhead $10 Instructions: a) Calculate the total cost of the finished goods inventory under absorption costing. b) Calculate the total cost of the finished goods inventory under variable costing

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Answer #2

a)

Direct material ( 6,400 x 84) 537,600
Direct labor ( 6,400 x 32) 204,800
Fixed factory overhead ( 6,400 x 14) 89,600
Variable factory overhead ( 6,400 x 10) 64,000
Cost of Finished Goods $896,000

The total cost of the finished goods inventory under absorption costing is $896,000

b)

Direct material ( 6,400 x 84) 537,600
Direct labor ( 6,400 x 32) 204,800
Variable factory overhead ( 6,400 x 10) 64,000
Cost of Finished Goods $804,600

The total cost of the finished goods inventory under variable costing is $804,600

Kindly comment if you need further assistance. Thanks‼!         

answered by: anonymous
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