Answer:
$196,000
Explanation:
Given that,
Direct materials, = $7 per unit,
Direct labor, = $5 per unit,
Variable overhead, = $6 per unit
Fixed overhead = $350,000
Total variable cost per unit:
= Direct Material per unit cost + Direct Labor per unit cost + Variable Overhead per unit cost
= $7 + $5 + $6
= $18
Fixed cost overhead rate per unit:
= Fixed overhead ÷ Units produced
= $350,000 ÷ 35,000
= $10
Cost per unit as per Absorption costing:
= Fixed cost overhead rate per unit + Total variable cost per unit
= $10 + $18
= $28
Value of Ending Inventory:
= units in inventory at year-end × Cost per unit
= 7,000 × $28
= $196,000
