Exercises

1. At the end of the first year of operations, 6,400 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows:

Cost Category	Dollar Amount
Direct Materials	$85
Direct Labor	50
Fixed Factory Overhead	25
Variable Factory Overhead	16

Determine the cost of the finished goods inventory reported on the balance sheet under

1. the absorption costing concept and
2. the variable costing concept.