Absorption Costing, Value of Ending Inventory, Operating Income

Pattison Products, Inc., began operations in October and manufactured $49,000$ units during the month with the following unit costs:

Direct materials $$5\mathrm{.}00$

Direct labor $3\mathrm{.}00$

Variable overhead $1\mathrm{.}50$

Fixed overhead$*7\mathrm{.}00$

Variable marketing cost $1\mathrm{.}20$

$*$ Fixed overhead per unit $=$ $$343,000/49,000$ units produced $=$ $$7$

Total fixed factory overhead is $$343,000$ per month. During October, $47,600$ units were sold at a price of $$24\mathrm{.}50,$ and fixed marketing and administrative expenses were $$131,300.$

Required:

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$1.$ Calculate the cost of each unit using absorption costing. Round your final answer to the nearest cent.

$fill in the blank $0$f$41$d$5082$f$90$fc$4\_1$

$16\mathrm{.}50$

per unit

$2.$ How many units remain in ending inventory?

fill in the blank $0$f$41$d$5082$f$90$fc$4\_2$

units

What is the cost of ending inventory using absorption costing?

$fill in the blank $0$f$41$d$5082$f$90$fc$4\_3$

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$1.$ Absorption costing assigns all manufacturing costs $($fixed and variable$)$ to each unit produced.

$2.$ Beginning inventory $+$ Units Produced $$ Units Sold $=$ Ending inventory

Cost per unit x total units not sold $=$ cost of ending inventory.

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$3.$ Prepare an absorption$-$costing income statement for Pattison Products, Inc., for the month of October.

Pattison Products, Inc.

Absorption$-$Costing Income Statement

For the Month of October

Sales

$Sales

Less: Cost of goods sold

Less: Cost of goods sold

Gross profit $fill in the blank $6622$b$2$fa$500$d$068\_5$

Less:

Variable marketing expenses

Variable marketing expenses

Fixed marketing and administrative expenses

Fixed marketing and administrative expenses

Operating income $fill in the blank $6622$b$2$fa$500$d$068\_10$

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