Question

At Exodus Inc., 40,000 units are produced and 30,000 units are sold for a total of...

At Exodus Inc., 40,000 units are produced and 30,000 units are sold for a total of $720,000 in the first year of operations, resulting in operating income of $240,000. Fixed manufacturing costs are $120,000 and administrative costs are $80,000. Given this, the cost of the ending finished goods inventory under the absorption costing approach is

Select one:

a. $80,000.

b. not able to be determined from the provided information.

c. $ 70,000.

d. $110,000.

e. $90,000.

f. $100,000.

g. $120,000.

Homework Answers

Answer #1

OPTION - F. $100,000.

Sales - Gross Profit = Manufacturing Cost.

Gross Profit = Operating Income + Fixed Mfg cost + Administrative cost.

GP = $240000 + 120,000 + 80,000 = $440,000.

Manufacturing Cost = Sales - Gross Profit =>$720000-440000 = $280000.

Total Cost = Mfg cost + Fixed Overhead = $280,000 + 120,000 = $400,000.

Cost Per Unit = $400,000/40000 = $10.

Ending Inventory = Units Produced- Units Sold = 40000-30000 =10,000 Units.

Ending Inventory = 10,000 Units * $10 = $100,000.

Mfg cost = Direct Material + Labor + Variable Mfg Overhead.

If you have any doubts please comment on the answer.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Baylor, Inc. just finished its second year of operations. In the first year it produced 1,000...
Baylor, Inc. just finished its second year of operations. In the first year it produced 1,000 units and sold 400. The second year resulted in the same production level, but sales were 1,200 units. The variable costing income statements for both years are shown below: Year 1 Year 2 Sales $40,000 $120,000 Variable cost of goods sold $22,000 $66,000 Variable selling and administration 800 22,800 2,400 68,400 Contribution margin 17,200 51,600 Fixed overhead 30,000 30,000 Fixed selling and administration 15,000...
​McFarlane, Inc. reports the following​ information: Units produced 580 units Units sold 400 units Sales price...
​McFarlane, Inc. reports the following​ information: Units produced 580 units Units sold 400 units Sales price $ 160 per unit Direct materials $ 29 per unit Direct labor $ 12 per unit Variable manufacturing overhead $ 15 per unit Fixed manufacturing overhead $ 17800 per year Variable selling and administrative costs $ 6 per unit Fixed selling and administrative costs $ 13900 per year There are no beginning inventories. What is the ending balance in Finished Goods Inventory using variable​...
Figure 8-7. Ramon Company reported the following units of production and sales for June and July:...
Figure 8-7. Ramon Company reported the following units of production and sales for June and July: Units Month Produced Sold June 100,000 90,000 July 100,000 105,000 Income under absorption costing for June was $40,000; income under variable costing for July was $50,000. Fixed costs were $600,000 for each month. 7. Refer to Figure 8-7. How much was income for July using absorption costing? a. $50,000 b. $20,000 c. $80,000 d. $40,000 8. Refer to Figure 8-7. How much was income...
Q6 A company produced 10,000 units in March 2018 and sold 8,500 of them at $40...
Q6 A company produced 10,000 units in March 2018 and sold 8,500 of them at $40 each. The variable manufacturing costs per unit was $16 and the fixed cost per unit was $3 Variable selling and administrative expenses were $5 and the fixed selling and administrative expenses were $45,000.    1. Using absorption costing what would be the income from operations for March? $_____________________________________________ 1. Using variable costing what would be the income from operations for March? $_______________________________________________ C. Explain...
Hayes Inc. provided the following information for the current year: Beginning inventory 300 units Units produced...
Hayes Inc. provided the following information for the current year: Beginning inventory 300 units Units produced 950 units Units sold 994 units Selling price $ 350 /unit Direct materials $ 55 /unit Direct labor $ 36 /unit Variable manufacturing overhead $ 35 /unit Fixed manufacturing overhead $ 49,400 /year Variable selling/administrative costs $ 28 /unit Fixed selling/administrative costs $ 35,500 /year What is the unit product cost for the year using variable costing? Multiple Choice $178 $126 $154 $228 $228...
ABC Co. sells its product for $60 per unit. During 2019, it produced 70,000 units and...
ABC Co. sells its product for $60 per unit. During 2019, it produced 70,000 units and sold 60,000 units (there was no beginning inventory). Costs per unit are: direct materials $14, direct labor $8, and variable manufacturing overhead $3. Fixed costs are: $721,000 manufacturing overhead, and $90,000 selling and administrative expenses Cost of goods sold under absorption costing is?
Assume a company produced 12,500 units and sold 11,500 units in its first year of operations....
Assume a company produced 12,500 units and sold 11,500 units in its first year of operations. It also reported absorption costing net operating income of $40,000 and variable costing net operating income of $28,000. How much fixed manufacturing overhead per unit must be included in the company’s absorption costing unit product cost? Multiple Choice $10 $12 $14 $16
Trez Company began operations this year. During this first year, the company produced 100,000 units and...
Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Sales (80,000 units × $45 per unit) $ 3,600,000 Cost of goods sold Beginning inventory $ 0 Cost of goods manufactured (100,000 units × $25 per unit) 2,500,000 Cost of good available for sale 2,500,000 Ending inventory (20,000 × $25) 500,000 Cost of goods sold 2,000,000 Gross margin 1,600,000 Selling and administrative...
Problem 2 Input values Solve the given problem based on the following information. Company name Conglomco...
Problem 2 Input values Solve the given problem based on the following information. Company name Conglomco Scenario Table 1 Conglomco Income Statement Under Absorption Costing Conglomco Income Statement Under Absorption Costing 2011 ($) 2012 ($) 2011 ($) 2012 ($) Sales ($45 per unit)    900,000 1,800,000 Sales ($45 per unit) 900,000 1,800,000 Cost of goods sold ($31 per unit)    620,000 1,240,000 Cost of goods sold ($31 per unit) 620,000 1,240,000 Gross margin    280,000      560,000 Gross margin 280,000...
Trez Company began operations this year. During this first year, the company produced 100,000 units and...
Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Sales (80,000 units × $45 per unit) $ 3,600,000 Cost of goods sold Beginning inventory $ 0 Cost of goods manufactured (100,000 units × $25 per unit) 2,500,000 Cost of goods available for sale 2,500,000 Ending inventory (20,000 × $25) 500,000 Cost of goods sold 2,000,000 Gross margin 1,600,000 Selling and administrative...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT