A company produces a single product. Variable production costs are $12.10 per unit and variable selling and administrative expenses are $3.10 per unit. Fixed manufacturing overhead totals $37,000 and fixed selling and administration expenses total $41,000. Assuming a beginning inventory of zero, production of 4,100 units and sales of 3,650 units, the dollar value of the ending inventory under variable costing would be:

Question

Karter Bailey

Business

15 July, 03:37

A company produces a single product. Variable production costs are $12.10 per unit and variable selling and administrative expenses are $3.10 per unit. Fixed manufacturing overhead totals $37,000 and fixed selling and administration expenses total $41,000. Assuming a beginning inventory of zero, production of 4,100 units and sales of 3,650 units, the dollar value of the ending inventory under variable costing would be:

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Melissa · Answer 1

Ending inventory cost = $5,445

Explanation:

Giving the following information:

Variable production costs are $12.10 per unit

Assuming a beginning inventory of zero, production of 4,100 units and sales of 3,650 units.

Under the variable costing method, the unitary product cost is the sum of direct material, direct labor, and variable overhead. In this case is $12.1

We need to calculate the number of units in inventory:

Ending inventory in units = 4,100 - 3,650 = 450 units

Ending inventory cost = 450*12.1 = $5,445