HairNeat Inc. manufactures hair brushes that sell at wholesale for $2.60 per unit. Budgeted production in both 2016 and 2017 was 3,000 units. There was no beginning inventory in 2016. The following data summarized the 2016 and 2017 operations: 20162017Units sold2,5003,200Units produced3,0003,000Costs: Variable manufacturing costs per unit$0.65$0.65Fixed factory overhead$1,290$1,290Variable marketing per unit$0.80$0.80Fixed Selling and Administrative$650$650 What is the value of closing inventory in 2016 under absorption costing?Question 9 options: 1) $325 2) $540 3) $195 4) $324Next Page

Ending inventory (units) in 2016 = Units produced - Units sold = 3,000 units - 2,500 units = 500…

Answered: HairNeat Inc. manufactures hair brushes…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 4P

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HairNeat Inc. manufactures hair brushes that sell at wholesale for $2.60 per unit. Budgeted production in both 2016 and 2017 was 3,000 units. There was no beginning inventory in 2016. The following data summarized the 2016 and 2017 operations:

	2016	2017
Units sold	2,500	3,200
Units produced	3,000	3,000
Costs:
Variable manufacturing costs per unit	$0.65	$0.65
Fixed factory overhead	$1,290	$1,290
Variable marketing per unit	$0.80	$0.80
Fixed Selling and Administrative	$650	$650

What is the value of closing inventory in 2016 under absorption costing?

Question 9 options:

$325

$540

$195

$324

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