If 1700 units remain unsold at the end of the month, the amount of inventory that would be reported on the absorption costing balance sheet is option A. 2,890,000. Variable cost per unit = (42,500 + 85,000 + 47,500+12,500) / 2,500 = $1700. 1700 units x $1700 = 2,890,000 (Since operating expenses incurred for the sales, cannot be included).
Inventory or stock refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilisation. Inventory management is a discipline primarily about specifying the shape and placement of stocked goods.
Therefore, the correct answer is as given above
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The complete question goes thus:
If 1700 units remain unsold at the end of the month, the amount of inventory that would be reported on the absorption costing balance sheet is
a. $2,890,000
b. $2,550,000
c. $2,720,000
d. $3,080,000
