Question

Question 2 15 points RAK Media produces product SYZ. Compute the correct inventory value of one unit of product SYZ Description Direct materials and labor Variable production overhead for 500 units Factory administrative costs for 500 units Fixed production costs Cost to bringing inventories to their present location and condition for 500 units Selling Costs for 500 units Abnormal amounts of wasted materials, labor, or other production costs Storage costs essential to the production process Freight and Insurance on purchase Rebates attributable to purchase Cost $4 per unit 250 10,000 0.5 per unit 750 4,500 0.15 per unit 1.8 per unit 0.9 per unit 0.1 per unit TTTT Paragraph Arlal *DOQO 3.(12pt) T T' T. THE ESS

Answer 1

Direct material and labor					$       4.00
Variable production overhead per unit (250/500)					$       0.50
Factory administration costs per unit (10000/500)					$    20.00
Fixed production costs per unit					$       0.50
Cost to bring the inventories at present condition (750/500)					$       1.50
Essential storage cost per unit					$       1.80
Fright and insurance on purchase					$       0.90
Less: rebates attributable to purchase					$    (0.10)
Correct ending inventory value					$    29.10

Selling costs is not part of the product cost.

Abnormal amounts of wastage of labor and materials is not considered as product cost