Answer (C) is correct . The absorption method is required for financial statements prepared according to GAAP. It charges all costs of production to inventories. The variable cost of materials of $300,000, direct labor of $100,000, variable manufacturing overhead of $50,000, and the fixed manufacturing overhead of $80,000 are included. They total $530,000.
Answer (A) is incorrect because The amount of $400,000 does not include $80,000 of fixed manufacturing overhead and $50,000 of variable manufacturing overhead.
Answer (B) is incorrect because The amount of $450,000 is the inventoriable cost under variable costing.
Answer (D) is incorrect because The amount of $590,000 includes the fixed and variable selling and administrative costs.
|
Using absorption (full) costing, Fortech Company’s inventoriable costs are
