? O ? )?https://newconnec trnhedication.com/fiowconnect html Test Three Help Sav

Question

? O ? )?https://newconnec trnhedication.com/fiowconnect html Test Three Help Save & Exit Submit During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $6 per unit, D labor, $4 per unit, Variable overhead. $5 per unit, and Fixed overhead, S leavin 408,000. The company produced 34,000 units, and sold 27,500 units, g 6,500 units in inventory at year end. What is the value of ending inventory under variable costing? Multiple Choice $175,500 $408,000 $78,000 $97,500 Mc

Explanation / Answer

7. The value of ending inventory of 6,500 units under variable costing will amount to $97,500 which will be arrived by summing up $39,000+$26,000+$32,500 relating to Direct Material+ Direct Labour+Variable Overheads respectively.

Therefore, the correct answer will be option D I.e, $97,500.

11. The formula for Margin Of Safety will be (Actual Sales- Break Even Sales)=($260,000-$195,000)=$65,000.

Therefore, answer will be option C I.e, $65,000.

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