Question
This Company produces and sells a recycled plastic product that is used for building residential backyard decks. The operating costs for the past year were
This Company produces and sells a recycled plastic product that is used for building residential backyard decks. The operating costs for the past year were as follows:
Variable costs per unit:
Direct Materials $7.40
Direct Labour $3.20
Variable Overhead $0.70
Variable Selling $0.52
Fixed costs per year:
Fixed Overhead $360,000
Selling and Administrative $210,000
* Unit fixed cost is based on production
During the year, the company produced 600,000 boards and sold 635,000 at $14.00 each. The company had 43,000 boards in beginning finished goods inventory; costs have not changed from last year to this year.
REQUIRED:
- Assuming the company must adhere to GAAP (Generally Accepted Accounting Principles) what is the cost per unit reported on the Balance Sheet.
- What is the total dollar value in ending finished goods inventory (based on part the above).
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