Response to the following problem:
A business operated at 100% capacity during its first month and incurred the following costs:
production costs (10,000 units)
direct materials 80,000
direct labor 120,000
variable facctory overhead 140,000
fixed operating epxneses 40,000
380,000
operating expenses:
variable operating expenses 65,000
fixed operating expenses 25,000
90,000
If 1,000 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the absorption costing balance sheet?
a) $38,000
b $40,500
c) $34,000
d) $47,000
Please show calculations.