Q.16 A firm uses backflush costing to assign product costs to inventory and values inventory using direct costing. All actual amounts are equal to budgeted amounts.

Total DM- $100,000 Total DL- $40,000 Total Variable OH- $80,000 Total Fixed OH- $500,000 Total units completed and in process- 40,000 Units in FG-160 Units in process- 200

Finished goods has $1,000 beginning balance. After backflushing costs, what is the balance of the finished goods inventory account?

a.$880 b.$1,560 c.$1,880 d.$560