Company reports the following information for its first year of operations. Direct materials $ 18 per unit Direct labor $ 19 per unit Variable overhead $ 7 per unit Fixed overhead $ 221,650 per year Units produced 20,150 units Units sold 15,500 units Ending finished goods inventory 4,650 units Assume instead that Trio Company uses variable costing. 1. Compute the product cost per unit using variable costing. 2. Determine the cost of ending finished goods inventory using variable costing. 3. Determine the cost of goods sold using variable costing.
Company reports the following information for its first year of operations. Direct materials $ 18 per unit Direct labor $ 19 per unit Variable overhead $ 7 per unit Fixed overhead $ 221,650 per year Units produced 20,150 units Units sold 15,500 units Ending finished goods inventory 4,650 units Assume instead that Trio Company uses variable costing. 1. Compute the product cost per unit using variable costing. 2. Determine the cost of ending finished goods inventory using variable costing. 3. Determine the cost of goods sold using variable costing.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Trio Company reports the following information for its first year of operations.
| Direct materials | $ 18 | per unit |
|---|---|---|
| Direct labor | $ 19 | per unit |
| Variable |
$ 7 | per unit |
| Fixed overhead | $ 221,650 | per year |
| Units produced | 20,150 | units |
| Units sold | 15,500 | units |
| Ending finished goods inventory | 4,650 | units |
Assume instead that Trio Company uses variable costing.
1. Compute the product cost per unit using variable costing.
2. Determine the cost of ending finished goods inventory using variable costing.
3. Determine the cost of goods sold using variable costing.
Transcribed Image Text:Product cost per unit of finished goods using:
Product cost per unit
Absorption costing
$
0
Expert Solution
Step 1
Variable costing is a approach of cost accounting, under this method only variable cost is charges to product cost and fixed cost excludes from product cost. Fixed cost is considered as period cost under variable costing.
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