Figure 8-1

Multiple Choice

Figure 8-1. Last year,Fabre Company produced 20,000 units and sold 18,000 units at a price of $12.Costs for last year were as follows:
Fixed factory overhead is applied based on expected production.Last year,Fabre expected to produce 20,000 units.
Refer to Figure 8-1.Assuming that beginning inventory was zero,what is the value of ending inventory under absorption costing?

A) $5,480
B) $4,500
C) $10,900
D) $12,600
E) $5,750