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Question - Inventory Valuation under Absorption Costing and Variable Costing
At the end of the first year of operations, 6,400 units remained in the finished goodsinventory. The unit manufacturing costs during the year were as follows:
Direct materials $75
Direct labor $35
Fixed factory overhead $15
Variable factory overhead $12
Determine the cost of the finished goods inventory reported on the balance sheet under
(a) the absorption costing concept and
(b) the variable costing concept.
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