is question: 5 pts 14 of 28 (11 complete) lagan, Inc. has collected the followin

Question

is question: 5 pts 14 of 28 (11 complete) lagan, Inc. has collected the following data. (There are no beginning inventories) 700 units Units produced Sales price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative costs Fixed selling and administrative costs $110 per unit $20 per unit $14 per unit $7 per unit $19,900 per year $5 per unit $16,200 per year What is the ending balance in Finished Goods Inventory using variable costing if 400 units are sold? O A. $12,300 OB. S6000 C. S6.300 O D. $10.200

Explanation / Answer

CALCULATION OF CLOSING STOCK Unit Produced 700 Units Less: Sales 400 Units Closing Stock 300 Units Caclulation of Unit Cost of Production by using Variable Costing Particulars Amount Cost per Unit Direct Materials $                20.00 Direct Labour $                14.00 Variable Manufacturing Overhead $                  7.00 Total Manufacturing Variable Cost $                41.00 CALCULATION OF VALUE OF CLOSING STOCK FOR 2000 Units Endin Balance in Finished Goods inventory = (300 units * $ 41.00) $       12,300.00 Answer = Option A = $ 12,300

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