Question

A company produces a single product. Variable production costs are $13.90 per unit and variable selling and administrative expenses are $4.90 per unit. Fixed manufacturing overhead totals $55,000 and fixed selling and administration expenses total $59,000. Assuming a beginning inventory of zero, production of 5,900 units and sales of 4,550 units, the dollar value of the ending inventory under variable costing would be:

Answer 1

Answer:

Ending inventory= $18,795

Explanation:

Giving the following information:

The variable production costs are $13.90

Assuming a beginning inventory of zero, production of 5,900 units and sales of 4,550 units.

Under the variable costing method, the unitary product cost is calculated using the direct material, direct labor, and variable allocated overhead. In this case, the variable production cost.

Ending inventory= (5,900 - 4,550)*13.90= $18,795