Question

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: $ 170 15,400 13,700 1,700 Selling price Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expense $446,600 $ 178, 100 What is the total period cost for the month under variable costing? Multiple Choice $446,600 $260,300

Answer 1

Answer- The total period cost for the month under variable costing = $260300.

Explanation- Total period cost under variable costing = Fixed selling and administrative expenses+ Variable selling and administrative expenses

= $178100+($6 per unit*13700 units)

= $260300

Answer- The variable costing unit product cost was =$69 per unit.

Explanation-Unit product cost under Variable costing:-Direct materials + Direct Labor+ Variable manufacturing overhead

=$37+$23+$9

= $69 per unit

Answer- The absorption costing unit product cost was =$213 per unit

Explanation- Unit product cost under Absorption costing:-Direct materials + Direct Labor+ Variable manufacturing overhead + fixed manufacturing overhead

=$88+$79+$7+$39

= $213 per unit

Unit fixed manufacturing overhead= fixed manufacturing overhead/No. of units produced

=$210600/5400 units

=$39 per unit

Answer- The dollar value of the ending inventory under variable costing would be= $8125.

Explanation- Ending inventory under variable costing= Ending inventory in units*Variable product cost

= (4500 units-3850 units)*$12.50 per unit

= $8125