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? v2.cengagenowcom n takeAssignment take Assignment ain.do?in oker=assignments&take; Assignment Session o ator=assignment taked progress alse Chapter 20 Assignment Book Calculator Inventory Valuation under Absorption Costing and Variable Costing At the end of the first year of operations, 6,500 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows: Direct materials Direct labor Fixed factory overhead Variable factory overhead Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept. $31.30 15.70 5.00 4.40 Variable costing Check My Work Next Assignment Score: 0.0% Email Instructor Save and Exit Submit Assignment for Grading

Explanation / Answer

Under Absorption costing all costs are included whereas under Variable costing only variable costs are included.

Absorption Costing = 6,500 units x ($31.30 + $15.70 + $5 + $4.40) = 6,500 units x $56.40 = $ 366,600

Variable Costing = 6,500 units x ($31.30 + $15.70 + $4.40) = 6,500 units x $51.40 = $ 334,100

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