Gordon Company Produces a Single Product That Sells for $10

question 74

Multiple Choice

Gordon Company produces a single product that sells for $10 per unit. Last year, there were no beginning inventories, 100,000 units were produced, and 80,000 units were sold. The company has the following cost structure:
$\begin{array} { | l | r | r | } \hline & \text { Fixed Costs } & \text { Variable Costs } \\\hline \text { Raw materials } & - - & \$ 2.00 \text { per unit produced } \\\hline \text { Direct labour } & - - & 1.25 \text { per unit produced } \\\hline \text { Factory overhead } & \$ 120,000 & 0.75 \text { per unit produced } \\\hline \text { Selling and administrative } & 70,000 & 1.00 \text { per unit sold } \\\hline\end{array}$

-Under absorption costing,what was the carrying value on the balance sheet of the ending finished goods inventory? Do not round intermediate calculations.

• A) $80,000.
• B) $104,000.
• C) $110,000.
• D) $200,000.