A company produces a single product. Variable production costs are $13.1 per uni
ID: 2423107 • Letter: A
Question
A company produces a single product. Variable production costs are $13.1 per unit and variable selling and administrative expenses are $4.1 per unit. Fixed manufacturing overhead totals $47,000 and fixed selling and administration expenses total $51,000. Assuming a beginning inventory of zero, production of 5,100 units and sales of 4,150 units, the dollar value of the ending inventory under variable costing would be:
A company produces a single product. Variable production costs are $13.1 per unit and variable selling and administrative expenses are $4.1 per unit. Fixed manufacturing overhead totals $47,000 and fixed selling and administration expenses total $51,000. Assuming a beginning inventory of zero, production of 5,100 units and sales of 4,150 units, the dollar value of the ending inventory under variable costing would be:
Explanation / Answer
Statement showing computations Particulars Amount Opening Inventory - Production 5,100.00 Total units available for sale = 0+ 5100 5,100.00 Sales 4,150.00 Closing inventory = 5100- 4150 950.00 Variable production costs 13.10 Closing inventory Value in $ 12,445.00 Note: Under variable costing Fixed cost is not part of closing Inventory Also Variable sellinge expense would be incurred when sale is done thus not part of closing inv