Trio Company reports the following information for its first year of operations.

 Trio Company reports the following information for its first year of operations.

 Direct materials     $ 11     per unit
Direct labor     $ 25     per unit
Variable overhead     $ 5     per unit
Fixed overhead     $ 282,600     per year
Units produced     23,550     units
Units sold     18,500     units
Ending finished goods inventory     5,050     units
Exercise 6-1 (Algo) Computing unit and inventory costs under absorption costing LO P1

1. Compute the product cost per unit using absorption costing.

2. Determine the cost of ending finished goods inventory using absorption costing.

3. Determine the cost of goods sold using absorption costing.

 

Explanation

1.Fixed overhead ($282,600/23,550 units produced) = $12 per unit
 
2. Cost of ending finished goods inventory using absorption costing:
5,050 units × $53 per unit = $267,650
 
3. Cost of goods sold using absorption costing:
18,500 units × $53 per unit = $980,500
 

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