Answer the following questions using the information below: Heinrich Corporation

Question

Answer the following questions using the information below: Heinrich Corporation incurred fixed manufacturing costs of $6,000 during 20x5. Other information for 20x5 includes: The budgeted denominator level is 1,000 units. Units produced total 750 units Units sold total 600 units. Beginning inventory was zero. The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold 13) Fixed manufacturing costs included in ending inventory total: 13)_ A) $1,500 E) none of the above. B) $1,200 D) $900

Explanation / Answer

D) $900

Fixed manufacturing costs included in ending inventory total:

= ($6,000 / 1,000 units) × 150

= $900

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