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Inventory Valuation under Absorption and Variable Costing with Decrease in Ending Inventory
The following information pertains to Chacon Inc. for last year:
Beginning inventory in units 6,000
Units produced 20,000
Units sold 23,700
Costs per unit:
Direct materials $12.00
Direct labor $4.00
Variable overhead $2.25
Fixed overhead* $4.15
Variable selling expenses $3.00
Fixed selling and administrative expenses $24,300
* Fixed overhead totals $83,000 per year.
Required:
1. Calculate the cost of one unit of product under absorption costing. Round your answer to the nearest cent.
$_____________per unit
2. Calculate the cost of one unit of product under variable costing. Round your answer to the nearest cent.
$_____________per unit
3. How many units are in ending inventory?
_____________ units
4. Calculate the cost of ending inventory under absorption costing.
$_____________
5. Calculate the cost of ending inventory under variable costing.
$_____________
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