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Ohara Company sells its product for $25 per unit. During 2016, it produced 20,000 units and sold 15,000 units (there was no beginning inventory). Costs
Ohara Company sells its product for $25 per unit. During 2016, it produced 20,000 units and sold 15,000 units (there was no beginning inventory). Costs per unit are: direct materials $5, direct labour $4, and variable overhead $3. Fixed costs are: $300,000 manufacturing overhead, and $50,000 selling and administrative expenses. Under absorption costing, what amount of fixed overhead is deferred to a future period?
a. $70,000
b. $300,000
c. $75,000
d. $225,000
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