Freetown Corporation incurred fixed manufacturing costs of $30,000 during 2017. Other information for 2017 includes:
The budgeted denominator level is 2,000 units.
Units produced total 1,800 units.
Units sold total 1,300 units.
Beginning inventory was zero.
The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold.
Fixed manufacturing costs included in ending inventory total ________. (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)
A) $8,333
B) $11,538
C) $7,500
D) $0

Question

Quizplus · Accepted Answer

The fixed manufacturing expense attributable to each unit produced is $15.00($30,000/2,000 units. The number of units in the ending inventory is 500 units (1,800 - 1,300). Therefore, the total fixed manufacturing costs included in the ending inventory is 11ea1398_f09d_c6e0_a1e4_359a413853ba_TB3027_11

Freetown Corporation Incurred Fixed Manufacturing Costs of $30,000 During 2017