Inventory valuation under absorption costing during the most recent year, judson company had the following data associated with the product it makes: units in beginning inventory 300 units produced 15,000 units sold ($300 per unit) 12,700 variable costs per unit: direct materials $20 direct labor $60 variable overhead $12 fixed costs: fixed overhead per unit produced $30 fixed selling and administrative $140,000 how many units are in ending inventory?

Value(ending inventory) = Units (ending inventory) × Cost per unit

= (2600 × 122)

= $ 317,200

Explanation:

Given :

Beginning inventory = 300

Units produced = 15,000

Units sold ($300 per unit) = 12,700

Variable costs per unit:

Direct materials = $20

Direct labor = $60

Variable overhead = $12

Fixed costs:

Fixed overhead per unit produced = $30

Fixed selling and administrative = $140,000

Units in ending inventory = Units in beginning inventory + Units produced - Units sold ($300 per unit)

= $300 + $15000 - $12700

= $2600

Cost per unit = Variable costs per unit  + Fixed costs

= (Direct material + Direct labor + Variable overhead) +  Fixed overhead per unit produced

= ($20 + $60 + $12) + $30

= $122

Value of ending inventory = Units in ending inventory  × Cost per unit

= (2600 × 122)

= $ 317,200