Gordon Company produces a single product that sells for $10 per unit. Last year

Question

Gordon Company produces a single product that sells for $10 per unit. Last year there were no beginning inventories, 100,000 units were produced, and 80,000 units were sold. The company has the following cost structure:

The carrying value on the balance sheet of the ending finished goods inventory under absorption costing would be:

Gordon Company produces a single product that sells for $10 per unit. Last year there were no beginning inventories, 100,000 units were produced, and 80,000 units were sold. The company has the following cost structure: The carrying value on the balance sheet of the ending finished goods inventory under absorption costing would be: $80,000 $104,000 $110,000 $124,000

Explanation / Answer

No.of units left out of goods produced = 100000 - 80000 = 20000 units.

Cost of th goods =[( 2+1.25+0.75) ] x 20000 = 4 x 20000 = $80000

carryiing value = $80000

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