DeAnne Company produces a single product. The company\'s variable costing income

Question

DeAnne Company produces a single product. The company's variable costing income statement for August appears below DeAnne Company Income Staement For the month ended August 31 Sales ($17 per unit) $ 708,900 Variable expenses:   Please show calculations.

The company produced 35,830 units in August and the beginning inventory consisted of 8,560 units. Variable production costs per unit and total fixed costs have remained constant over the past several months.

$26,900

$43,040

$34,970

$48,040

Thank you for the help!

DeAnne Company
Income Staement
For the month ended August 31   Sales ($17 per unit) $ 708,900   Variable expenses:   Variable cost of goods sold 417,000   Variable selling expense 125,100      Total variable expenses 542,100      Contribution margin 166,800      Fixed expenses:   Fixed manufacturing overhead 107,490   Fixed selling and administrative 35,830      Total fixed expenses 143,320        Net operating income $ 23,480

Explanation / Answer

Answer . C. $34970 Calculation of Inventory (In Units) on Aug 31 Inventory at the beginning             8,560 add: Produced during the August           35,830 Less: Sold during the August ($708900 /$17)         (41,700) Inventory at the end of August             2,690 Calculation of Cost Under Absorption Costing Variable Cost per Unit (417000 / 41700) 10 Fixed Manufacturing Overhead (107490 / 35830) 3 Total Cost Per Unit 13 Cost of Inventory at the end of Aug. (2690 Units X $13)           34,970 Note: Selling and administrative expenses (both variable and fixed) are not relevant for the computation of unit product cost.

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