Question

A company produces a single product. Variable production costs are $13.00 per unit and variable selling and administrative expenses are $4.00 per unit. Fixed manufacturing overhead totals $46,000 and fixed selling and administration expenses total $50,000. Assuming a beginning inventory of zero, production of 5,000 units and sales of 4,100 units, the dollar value of the ending inventory under variable costing would be:

Answer 1

Answer:

$11,700

Explanation:

Ending Stock = Opening Stock + Production - Sales

                       = 0 + 5,000 - 4,100

                       = 900

Ending Stock = 900 x $13.00 = $11,700

Therefore

The dollar value of the ending inventory under variable costing would be $11,700