In the Klein Company, 50,000 units are produced and 40,000 units are sold. Variable manufacturing costs per unit are $8 and fixed manufacturing costs are $160,000. The cost of the ending finished goods inventory under each costing approach is:
|
Absorption |
Variable |
|
|
Costing |
Costing |
|
|
$112,000 |
$ 80,000 |
|
|
$112,000 |
$100,000 |
|
|
$120,000 |
$80,000 |
|
|
$120,000 |
$100,000 |