Problem-
Carr Company produces a single product. During the past year, Carr manufactured 25,000 units and sold 20,000 units. Production costs for the year were as follows:
Fixed manufacturing overhead $250,000
Variable manufacturing overhead $210,000
Direct labor $120,000
Direct materials $180,000
Sales totaled $850,000, variable selling expenses totaled $110,000, and fixed selling and administrative expenses totaled $170,000. There were no units in beginning inventory. Assume that direct labor is a variable cost. Under absorption costing, the ending inventory for the year would be valued at:
a. $213,500
b. $179,500
c. $152,000
d. $222,000
Additional Requirement
This problem belongs to Accounting and it discusses on calculation of inventory cost under absorption.