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Inventory Valuation under Absorption Costing During the most recent year, Judson Company had the following data...

Inventory Valuation under Absorption Costing

During the most recent year, Judson Company had the following data associated with the product it makes:

Units in beginning inventory 300
Units produced 15,000
Units sold ($300 per unit) 12,700
Variable costs per unit:
Direct materials $20
Direct labor $60
Variable overhead $12
Fixed costs:
Fixed overhead per unit produced $30
Fixed selling and administrative $140,000


Required:

1. How many units are in ending inventory?

$ units

2. Using absorption costing, calculate the per-unit product cost.

$

3. What is the value of ending inventory under absorption costing?

Solutions

Expert Solution

1. Units Ending Inventory = Units Beginning Inventory + Units Produced - Units Sold

   = 300 + 15000 + 12700

                                     = 2600

2.

2. Calculation of per-unit product cost
Direct Material $20
Direct Labour $60
Variable Overhead $12
Fixed Overhead $30
Unit Product Cost $122

3. Value of Ending Inventory = Units Ending Inventory * Absorption Unit Product Cost

                                          = 2600 * 122

                                          = $317200

ekkarill92 answered 2 years ago
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