Calculation of value of the ending inventory
The dollar value of the ending inventory using full costing will be?
The Williams Company currently produces 20,000 units of part B13. Current costs for part B13 are as follows:
|
Direct materials
|
$12
|
|
Direct labor
|
9
|
|
Factory rent
|
7
|
|
Administrative
|
6
|
|
General factory overhead
|
7
|
|
Total
|
$41
|
If the company decides to buy part B13, 50% of the administrative costs would be avoided. All of the Williams Company items (including this part) are manufactured in the same rented production facility.
Hint: Variable costs in the contribution income statement of 2007: $1,464,500