During fiscal year 2016, Munson Manufacturing made and sold vinyl siding. At the beginning of the year the company had 3, 800 units. During the year Munson made 892, 500 units and sold 887, 600 units. Each unit cost the company $2.18 to manufacture and each unit is sold for $4.22. At the end of the year, what amount will Munson report on its balance sheet for finished goods inventory?
A. $10,682
B. $36,714
C. $20,678
D. $18,966

correct option is D. $18,966

Explanation:

given data

Beginning inventory = 3800 units

during year Units manufactured  = 892500  

unit sold = 887600  units

Cost of each unit = $2.18

sold each unit  = $4.22

solution

we get here first Units available for sale that is

Units available for sale = Beginning inventory +  Units manufactured

Units available for sale = 3800  + 892500  

Units available for sale = 896300  

Beginning inventory,units3800

and now we  get Finished goods inventory that is

Finished goods inventory = Units available for sale - Units sold

Finished goods inventory = 896300   - 887600

Finished goods inventory =  8700  

so now Finished goods inventory balance is = Cost of each unit × Finished goods inventory

Finished goods inventory balance is = $2.18  × 8700  

Finished goods inventory balance is $18966  

so correct option is D. $18,966

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