Question

# Trio Company reports the following information for the current year, which is its first year of...

Trio Company reports the following information for the current year, which is its first year of operations.

 Direct materials \$ 15 per unit Direct labor \$ 16 per unit Overhead costs for the year Variable overhead \$ 75,000 per year Fixed overhead \$ 150,000 per year Units produced this year 25,000 units Units sold this year 19,000 units Ending finished goods inventory in units 6,000 units

1. Compute the product cost per unit using absorption costing

2. Determine the cost ending finished goods inventory using absorption costing.

3. Determine the cost of goods sold using absorption costing.

1.

 Direct material 15 Direct labor 16 Variable overhead (75,000/25,000) 3 Fixed overhead (150,000/25,000) 6 Product cost per unit \$40

2.

Ending finished goods inventory = 6,000 units

Cost of ending finished goods inventory = Ending finished goods inventory x cost per unit

= 6,000 x 40

= \$240,000

3.

Number of units sold = 19,000 units

Cost of goods sold = Number of units sold x Cost per unit

= 19,000 x 40

= \$760,000

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