Columbia Corporation produces a single product. The company's variable costing income statement for November appears below:
During November, 35,000 units were manufactured and 8,000 units were in beginning inventory. Variable production costs have remained constant on a per unit basis over the past several months.
-The value of the company's inventory on November 30 under absorption costing would be:
A) $54,000
B) $66,000
C) $78,000
D) $81,000

Question

Columbia Corporation produces a single product. The company's variable costing income statement for November appears below:
  During November, 35,000 units were manufactured and 8,000 units were in beginning inventory. Variable production costs have remained constant on a per unit basis over the past several months.
-The value of the company's inventory on November 30 under absorption costing would be:
A) $54,000 
B) $66,000 
C) $78,000 
D) $81,000

Quizplus · Accepted Answer

Units sold = $1,200,000 ÷ $30 per unit = 40,000 units
Units in beginning inventory + Units produced = Units sold + Units in ending inventory
8,000 units + 35,000 units = 40,000 units + Units in ending inventory
Units in ending inventory = 8,000 units + 35,000 units - 40,000 units = 3,000 units
 11ea7761_181c_1cc7_81a5_29c005f119d5_TB2580_00

Columbia Corporation Produces a Single Product