FAGAN MANUFACTURING COMPANY INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2009 Sales $900,000 Cost of goods sold: Finished goods inventory, January 1 $0 Cost of goods manufactured 812,500 Goods available for sale $812,500 Finished goods inventory, December 31 162,500 Cost of goods sold 650,000 Gross margin $250,000 Less Operating expenses: Selling $135,000 Administrative 30,000 Total selling and administrative 165,000 Operating profit $85,000 The following additional information is available: Variable costs per unit: Direct materials $9.50 Direct labor 12.00 Manufacturing overhead 4.00 Selling expenses 5.50 Fixed costs for the period: Manufacturing overhead $175,000 Selling 25,000 Administrative 30,000 REQUIRED Show ALL necessary workings using the formula on excel.

This question has 3 requirements as specified below. Write your answer on the higlighted spaces. 1. In absorption costing, how much fixed manufacturing overhead cost was deferred (that is not expensed) in finished goods inventory?