Assume Air Tec manufactures only one component for the air conditioning industry.In 2013 the company produced 12 000 units of the component of which 10 000 were sold.The following costs were recorded for 2013:
$\begin{array}{llcc}
&\text { \$ }\
\text { Direct material} &500000 \
\text {Direct labour } &150000\
\text { Manufacturing overhead } &220000\
\text { Administrative expenses } & 97000\
\end{array}$

If there were 1000 units in beginning inventory,calculate the value of ending inventory for Air Tec.
A)$72 500
B)$145 000
C)$217 500
D)$241 750

Question

Assume Air Tec manufactures only one component for the air conditioning industry.In 2013 the company produced 12 000 units of the component of which 10 000 were sold.The following costs were recorded for 2013:
$\begin{array}{llcc}
  &\text { \$ }\
  \text { Direct material} &500000  \
 \text {Direct labour  } &150000\
 \text { Manufacturing overhead } &220000\
 \text { Administrative expenses } &  97000\
\end{array}$

If there were 1000 units in beginning inventory,calculate the value of ending inventory for Air Tec.
A)$72 500
B)$145 000
C)$217 500
D)$241 750

Quizplus · Accepted Answer

The cost per unit is calculated by adding direct material, direct labor, and manufacturing overhead, then dividing by the total units produced. The ending inventory is the cost per unit multiplied by the number of unsold units.

Assume Air Tec Manufactures Only One Component for the Air