7. Last year, Delbert Company produced 10,000 units and sold 9,000 units at a pr

Question

7. Last year, Delbert Company produced 10,000 units and sold 9,000 units at a price of $9. Costs for last year were as follows: Direct materials $10,000 Direct labor 15,000 Variable factory overhead 5,000 Fixed factory overhead 20,000 Variable selling expense 7,200 Fixed selling expense 5,000 Fixed administrative expense 12,000 Fixed factory overhead is applied based on expected production. Last year, Delbert expected to produce 10,000 Assuming that beginning inventory was zero, what is the value of ending inventory under variable costing? a. $5,720 b. $3,000 c. $5,000 d. $3,720 e. $2,000

Explanation / Answer

10000/10000=1

15000/10000=1.5

5000/10000=0.5

20000/10000=2

1+1.5+0.5+2= 5

0+10000-9000=1000

1000x5=5000 the answer is 5000

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