Lane Company produced 50,000 units during its first year of operations and sold 47,300 at $12 per unit. The company chose practical activity—at 50,000 units—to compute its predetermined overhead rate. Manufacturing costs are as follows: Direct materials $123,000 Direct labor 93,000 Variable overhead 65,000 Fixed overhead 51,000 Required: Calculate the cost of one unit of product under variable costing. Calculate the cost of ending inventory under variable costing.
Lane Company produced 50,000 units during its first year of operations and sold 47,300 at $12 per unit. The company chose practical activity—at 50,000 units—to compute its predetermined overhead rate. Manufacturing costs are as follows: Direct materials $123,000 Direct labor 93,000 Variable overhead 65,000 Fixed overhead 51,000 Required: Calculate the cost of one unit of product under variable costing. Calculate the cost of ending inventory under variable costing.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Lane Company produced 50,000 units during its first year of operations and sold 47,300 at $12 per unit. The company chose practical activity—at 50,000 units—to compute its predetermined
| Direct materials | $123,000 |
| Direct labor | 93,000 |
| Variable overhead | 65,000 |
| Fixed overhead | 51,000 |
Required:
-
Calculate the cost of one unit of product under variable costing.
-
Calculate the cost of ending inventory under variable costing.
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