Question Content Area A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (20,000 units): Line Item Description Amount Amount   Direct materials $180,000     Direct labor 240,000     Variable factory overhead 280,000     Fixed factory overhead 100,000 $800,000 Operating expenses:       Variable operating expenses $130,000     Fixed operating expenses 50,000 180,000 If 1,600 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet is a. $78,400 b. $56,000 c. $66,400 d. $64,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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    A business operated at 100% of capacity during its first month and incurred the following costs:

    Production costs (20,000 units):
    Line Item Description Amount Amount
      Direct materials $180,000  
      Direct labor 240,000  
      Variable factory overhead 280,000  
      Fixed factory overhead 100,000 $800,000
    Operating expenses:    
      Variable operating expenses $130,000  
      Fixed operating expenses 50,000 180,000

    If 1,600 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet is

    a. $78,400
    b. $56,000
    c. $66,400
    d. $64,000
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