Answer:
Option (D) is correct.
Explanation:
Estimated finished goods inventory balance at the end of May:
Estimated finished goods Ending Inventory:
= 13,300 units (June sale) × 10%
= 1,330 units
Units Produced:
= Estimated sale + Ending Inventory of finished goods – Beginning inventory of finished goods
= 10,100 units + (13,300 units × 10%) - (10,100 units × 10%)
= 10,420 units
Total cost of Production:
= Raw Material Cost + Direct Labour cost + Variable mfr O/H
= (10,420 units × 5 pound × $5) + (10,420 units × 2.9 hrs × $18) + (10,420 units × 2.9 hrs × $7)
= 260,500 + 543,924 + 211,526
= $1,015,950
Cost per unit = Total cost of Production ÷ Units produced
= $1,015,950 ÷ 10420
= $97.5 per unit
Cost of Ending Inventory of finished goods:
= Estimated finished goods Ending Inventory × Cost per unit
= 1,330 units × $97.5
= $129,675
