Question

A company produces a single product. Variable production costs are $12.30 per unit and variable selling and administrative expenses are $3.30 per unit. Fixed manufacturing overhead totals $39,000 and fixed selling and administration expenses total $43,000. Assuming a beginning inventory of zero, production of 4,300 units and sales of 3,750 units, the dollar value of the ending inventory under variable costing would be:

Answer 1

Ending inventory= $6,765

Step-by-step explanation:

Giving the following information:

Variable production costs are $12.30 per unit

Assuming a beginning inventory of zero, production of 4,300 units, and sales of 3,750 units.

The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead) to calculate production costs.

Units in ending inventory= 550

Ending inventory= 12.3*550= $6,765