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Absorption Costing, Value of Ending Inventory, Operating Income Pattison Products, Inc., began operations in October and manufactured 58,000 units during the month with the following
Absorption Costing, Value of Ending Inventory, Operating Income
Pattison Products, Inc., began operations in October and manufactured 58,000 units during the month with the following unit costs:
Direct materials | $7.00 |
Direct labor | 5.00 |
Variable overhead | 2.50 |
Fixed overhead* | 9.00 |
Variable marketing cost | 2.20 |
* Fixed overhead per unit = $522,000 / 58,000 units produced = $9
Total fixed factory overhead is $522,000 per month. During October, 55,600 units were sold at a price of $31.50, and fixed marketing and administrative expenses were $113,300.
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