what is the ending balance in finished goods inventory using absorption costing if 80 units are sold (assume no beginning inventory in finished goods inventory)?

Answer:

To calculate the ending balance in finished goods inventory using absorption costing, you need to consider the cost of goods manufactured (COGM) and the cost of goods sold (COGS). Absorption costing allocates both variable and fixed manufacturing costs to the cost of goods manufactured, and these costs are carried over to finished goods inventory until the products are sold.

Here's how you can calculate the ending balance in finished goods inventory:

Calculate the total manufacturing cost (COGM) for the number of units produced. This includes both variable and fixed manufacturing costs.

Calculate the cost per unit by dividing the total manufacturing cost by the total number of units produced.

Multiply the cost per unit by the number of units in finished goods inventory.

Here's a formula to represent this calculation:

Ending Finished Goods Inventory = (Total Manufacturing Cost / Total Units Produced) * (Total Units Produced - Units Sold)

If you have specific cost figures for variable and fixed manufacturing costs and the total number of units produced, you can use these values in the calculation. However, I would need those specific values to provide you with a numerical answer.

Explanation:

Final answer:

Without having information regarding production costs or units produced, the ending balance in finished goods inventory using absorption costing can't be precisely determined. However, it's generally calculated using the formula: Beginning inventory + Cost of Goods Manufactured - Cost of Goods Sold = Ending Inventory.

Explanation:

In absorption costing, all manufacturing costs, both fixed and variable, are assigned to units of product. They are thus 'absorbed' by the goods inventory. Given you've sold 80 units and we're not given any other information such as production costs or units produced, specific ending balance in the finished goods inventory using absorption costing can't be determined.

That being said, the general formula to determine the ending balance in a finished goods inventory would be: Beginning inventory + Cost of Goods Manufactured - Cost of Goods Sold = Ending Inventory. In this case, since the beginning inventory is zero, if you know your Cost of Goods Manufactured (COGM) and Cost of Goods Sold (COGS), you could calculate the ending balance.

Learn more about Absorption Costing here:

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