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Power Inc. manufactures audio speakers. The variablecost per speaker is as follows: Direct materials $ 3.50 Direct labour 1.75 Variable manufacturing overhead 1.25 Sales commission

Power Inc. manufactures audio speakers. The variablecost per speaker is as follows:

Direct materials $ 3.50

Direct labour 1.75

Variable manufacturing overhead 1.25

Sales commission 0.75

Total variable cost per speaker $ 7.25

All other costs are fixedand include selling costs of $75,000 per year, administrative costs of $45,000 annually and fixed manufacturing overhead of $270,000 per year. There was no beginning WIP or finished goods inventory. During the past year, a total of 50,000 speakers were manufactured, and 45,000 speakers were sold at $25.00 each.

What would the cost of the ending finished goods inventory be under absorptioncosting?

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