COMPUTING INVENTORY COST UNDER ABSORPTION AND VARIABLE COSTING During the most recent year, B&O Cafe had the following data associated with the items it makes:

Units in beginning inventory —

Units produced 17,000 Units sold ($200 per unit) 14,000 Variable costs per unit:

Direct materials $35 Direct labor $65 Variable overhead $30 Fixed costs:

Fixed manufacturing overhead per unit produced $20 Fixed selling and administrative $200,000 Required:

. How many units are in ending inventory?

. Using absorption costing, calculate the per-unit product cost. What is the value of ending inventory?

. Using variable costing, calculate the per-unit product cost. What is the value of ending inventory?

Cornerstone Exercise