Reference no: EM133173811
Question - Last year, Doorknob Company produced 10,000 units and sold 9,000 units at a sales price of $9 per unit. Costs for last year were as follows:
Direct materials $10,000
Direct labour 15,000
Variable manufacturing overhead 5,000
Fixed manufacturing overhead 20,000
Variable selling expense 7,200
Fixed selling expense 5,000
Fixed administrative expense 12,000
Fixed manufacturing overhead is applied on the basis of expected production. Last year, the company expected to produce 10,000 units.
The company had no beginning inventories.
Show detail calculation to get proper credit.
A. Calculate unit product cost using Absorption Costing Method.
B. Calculate Cost of Ending Inventory using Variable Costing.
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