Under absorption costing, the value of the ending finished goods inventory would be:

A) $7,200
B) $7,650
C) $8,000
D) $9,700

Absorption Costing

A financial methodology that includes every cost related to producing a product—direct materials, direct labor, and both kinds of overhead expenses (variable and fixed), into the product’s final cost.

Ending Finished Goods

Ending Finished Goods are the inventory of completed products that are available for sale at the end of an accounting period.