Problem - Inventory Valuation under Absorption Costing
Hansard Company produced 39,410 units during its first year of operations and sold 38,890 at $17 per unit. The company chose practical activity-at 39,410 units-to compute its predetermined overhead rate. Manufacturing costs are as follows:
Direct materials - $82,350
Direct labor - 101,600
Variable overhead - 15,400
Fixed overhead - 50,500
Required:
1. Calculate the unit cost for each of these four costs. Round your answers to the nearest cent.
2. Calculate the cost of one unit of product under absorption costing. Round your answer to the nearest cent.
3. How many units are in ending inventory?
4. Calculate the cost of ending inventory under absorption costing. Round your answer to the nearest dollar.