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During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $5 per unit, Direct labor, $3 per unit, Variable overhead, $4 per unit, and Fixed overhead, $250,000. The company produced 25,000 units and sold 20,000 units, leaving 5,000 units in inventory at year-end. What is the value of ending inventory under variable costing? A. $60,000. B. $110,000. C. $50,000. D. $250,000.

During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $5 per unit, Direct labor, $3 per unit, Variable overhead, $4 per unit, and Fixed overhead, $250,000. The company produced 25,000 units and sold 20,000 units, leaving 5,000 units in inventory at year-end. What is the value of ending inventory under variable costing? A. $60,000. B. $110,000. C. $50,000. D. $250,000.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $5 per unit, Direct labor, $3 per unit, Variable overhead, $4 per unit, and Fixed overhead, $250,000. The company produced 25,000 units and sold 20,000 units, leaving 5,000 units in inventory at year-end. What is the value of ending inventory under variable costing? A. $60,000. B. $110,000. C. $50,000. D. $250,000.
Transcribed Image Text:During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $5 per unit, Direct labor, $3 per unit, Variable overhead, $4 per unit, and Fixed overhead, $250,000. The company produced 25,000 units and sold 20,000 units, leaving 5,000 units in inventory at year-end. What is the value of ending inventory under variable costing? A. $60,000. B. $110,000. C. $50,000. D. $250,000.
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