Reference no: EM132116759

Question - Inventory Valuation under Absorption and Variable Costing

Overton Company produced 80,000 units last year. The company sold 79,000 units and there was no beginning inventory. The company chose practical activity-at 80,000 units-to compute its predetermined overhead rate. Manufacturing costs are as follows:

Direct materials	$596,000
Direct labor	104,000
Variable overhead	88,000
Fixed overhead	228,800

Required:

1. Calculate the cost of one unit of product under absorption costing.

2. Calculate the cost of one unit of product under variable costing.

3. Calculate the cost of ending inventory under absorption costing.

4. Calculate the cost of ending inventory under variable costing.