The industrial company Wenting, in the costs and expenses during the first

month of the new model year. There were no stocks at the beginning of the year.

Production 105,000 units

Materials

$420 000

Direct labor $315,000

Indirect manufacturing costs $210,000 fixed and $129,150 variable

Fixed selling expenses $14,000 $25,000 variable

Fixed administration expenses $28,000 and $12,500 variable

Units Sold 75,000 at a price of $24 per unit.

Is required:

a) Calculate the final inventory with the direct cost.

b) Calculate the final inventory with absorption costing.

c) Calculate the net profit with the two cost methods.