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Amalgamated Glass and Mirror Inc. had sales of 37,500 units and production of 50,000 units. Other information for the year included:

Direct manufacturing labour   $375,000
Variable manufacturing overhead   200,000
Direct materials   300,000
Variable selling expenses   200,000
Fixed administrative expenses   200,000
Fixed manufacturing overhead   400,000
There was no beginning inventory.

Required:
a.   Compute the ending finished goods inventory under both absorption and variable costing.
b.   Compute the cost of goods sold under both absorption and variable costing.

a.
   Absorption   Variable
Direct materials   $300,000   $300,000
Direct manufacturing labour   375,000   375,000
Variable manufacturing overhead   200,000   200,000
Fixed manufacturing overhead      400,000              0
Total   $1,275,000   $875,000

Unit costs:
   $1,275,000/50,000 units    $25.50
   $875,000/50,000 units      $17.50

Ending inventory:
   12,500 units × $25.50   $318,750
   12,500 units × $17.50      $218,750

b.
Cost of goods sold:
   37,500 × $25.50   $956,250
   37,500 × $17.50       $656,250

Best answer for me