DeAnne Company produces a single product. The company's variable costing income statement for August appears below: The company produced 35,000 units in August and the beginning inventory consisted of 8,000 units. Variable production costs per unit and total fixed costs have remained constant over the past several months.
-The value of the company's inventory on August 31 under the absorption costing method is:
A)$27,000
B)$42,000
C)$36,000
D)$47,000

Question

DeAnne Company produces a single product. The company's variable costing income statement for August appears below: The company produced 35,000 units in August and the beginning inventory consisted of 8,000 units. Variable production costs per unit and total fixed costs have remained constant over the past several months.
-The value of the company's inventory on August 31 under the absorption costing method is:
A)$27,000 
B)$42,000 
C)$36,000 
D)$47,000

Quizplus · Accepted Answer

Units sold = $600,000 F1F1F1S1F1F1F10 $15 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
 11eaa48f_7ba5_716f_9e4a_efd330f0c81f_TB2485_00

DeAnne Company Produces a Single Product