Question

A company produces a single product. Variable production costs are $13.50 per unit and variable selling and administrative expenses are $4.50 per unit. Fixed manufacturing overhead totals $51,000 and fixed selling and administration expenses total $55,000. Assuming a beginning inventory of zero, production of 5,500 units and sales of 4,350 units, the dollar value of the ending inventory under variable costing would be: 

Murphy Inc., which produces a single product, has provided the following data for its most recent month of operation:

Answer 1

Solution Question 1. Units Beginning Inventory units Add: Production 5,500 Less: Sales 4,350 Ending inventory units 1,150 $13.50 Variable production cost per unit - Ending inventory units x Variable production cost per unit 1,150 units x $13.50 - $15,525 nce the correct optioni $15,525 Absorption Variable Costin Costin 169.00 $169.00 $80.00 $80.00 $5.00 Direct Material cost per unit Direct labor cost per unit $5.00 Variable manufacturing O/H cost per unit Fixed manufacturing O/H applied per unit ($765,600/13,200) 58.00 0.00 $312.00 $254.00 Unit Product cost Unit Product Cost a. Absorption costin 312.00 b. Varia ble costin 254.00

Question 3 Variable costing unit product cost for the month Variable Costing $59.00 $61.00 Direct Material cost per unit 24.00 Variable manufacturing O/H cost per unit $144.00 Unit Product Cost $14400 Variable costing eriod cost for the month under absorption costine Variable selling and administrative expense ($4 x 7,000) $28,000 $62,000 Total period cost