A company produces a single product. Variable production costs are $13.1 per uni

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

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