Silver Rex,Inc Requirements:
A)Compute Silver Rex's Unit Product Cost Under Absorption Costing

question 167

Multiple Choice

Silver Rex,Inc.has provided the following data for the year ended December 31,2017: $$\begin{array} { | l | r | } \hline \text { Direct materials } & \$ 10 \text { per unit } \\\hline \text { Direct labor } & \$ 15 \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 20 \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 25,000 \text { per year } \\\hline \text { Fixed selling and administrative costs } & \$ 15,000 \text { per year } \\\hline \text { Sales price } & \$ 75 \text { per unit } \\\hline \text { Beginning Finished Goods Inventory } & 500 \text { units } \\\hline \text { Units produced } & 5,000 \text { units } \\\hline \text { Units sold } & 4,500 \text { units } \\\hline\end{array}$$ Requirements:

• A)Compute Silver Rex's unit product cost under absorption costing and variable costing.
• B)Prepare income statements for Silver Rex using absorption costing and variable costing.
• C)Calculate the balance in Finished Goods Inventory using absorption costing and variable costing.
• Assume that the production level,costs,and sales prices were the same in the previous year.

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Definitions:

Collagen

A protein that is crucial for maintaining the structure and strength of skin, bones, tendons, and ligaments.

Epithelial Cells

Cells that line the outer surfaces of organs and blood vessels, as well as the inside of hollow organs, functioning as a barrier and involved in absorption and secretion.

Jackson-Pratt (JP) Drain

A closed suction drain that is used in surgery to remove accumulated fluid from a patient's body, reducing the risk of infection and promoting healing.

Hemovac Drain

A closed suction medical device used postoperatively to remove excess blood, fluids, and air from a wound site, promoting healing.