The Sullivan Company had 4,000 units in beginning inventory. During 2008 the com

Question

The Sullivan Company had 4,000 units in beginning inventory. During 2008 the company manufactured 100,000 units and sold 92,000 units. The company experienced the following costs:
Direct materials $5.75/unit
Direct labor $3.25/unit
Variable manufacturing overhead $2.80/unit
Variable selling $1.75/unit
Fixed manufacturing overhead $250,000
Fixed selling $35,000
Fixed administrative $25,000

If the company uses full costing the ending inventory for the year would be valued at:
Answer


$171,600

$114,400

$141,600

$192,600

Explanation / Answer

$171,600. Cost per unit is 5.75+3.25+2.80+2.50 (250,000/100,000)= 14.30 There are 12,000 in inventory so 12,000*14.30= 171,600.

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