What was the closing inventory valuation in February

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Question - Jake Ltd makes and sells a single product X. The following information for the quarter ended March 2023 is available:


January

February

March

Units Produced

900

875

875

Units Sold

650

825

850

The various costs per unit of X based on budgeted production and sales of 1,000 units per month is provided below.

Product

X

 

$per unit

Seling price per unit

400

Variable costs per unit


Direct Material

30

Direct Labour

40

Manufacturing Overhead

30

Selling and distribution

10

Budgeted Fixed costs per month


Manufacturing Overhead

150,000

Selling and distribution

50,000

There were no beginning inventories in January and the actual fixed costs were as budgeted. Selling price and all other costs were stable throughout the quarter. What was the closing inventory valuation in February based on absorption costing principles?

A. $72,000

B. $87,000

C. $75,000

D. $27,000

Reference no: EM133141488

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