9) McFadden, Inc. has collected the following data. (There are no beginning inve

Question

9) McFadden, Inc. has collected the following data. (There are no beginning inventories.) Units produced Sales price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative costs Fixed selling and administrative costs units S150 50 13 r unit er unit per unit er unit er year er unit er year $18,700 $5 $18,800 What is the ending balance in Finished Goods Inventory using variable costing if 550 units are sold? A) $2500 B) $3400 C) $900 D) $3150

Explanation / Answer

Calculate ending inventory balance under Variable costing :

68 per unit

so answer is b) $3400

Direct material 50 per unit Direct labour 13 per unit Variable manufacturing overhead 5 per unit Unit product cost under variable costing

68 per unit

Ending inventory unit (600-550) 50 Ending finished goods inventory balance 3400

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