Richetti produces stereo speakers. The selling price per pair of speakers is $1,800. There is no beginning inventory. Costs involved in production are: Direct material Direct labor $161 183 Variable manufacturing overhead 107 Total variable manufacturing costs per unit $451 Fixed manufacturing overhead per year $594,000 In addition, the company has fixed selling and administrative costs: Fixed selling costs per year $200,500 Fixed administrative costs per year $102,400 During the year, Richetti produces 1,500 pairs of speakers and sells 1,200 pairs. What is the value of ending inventory using variable costing?

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
Section: Chapter Questions
Problem 4CMA: Bethany Company has just completed the first month of producing a new product but has not yet...
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Richetti produces stereo speakers. The selling price per pair of speakers is $1,800. There is no
beginning inventory.
Costs involved in production are:
Direct material
Direct labor
$161
183
Variable manufacturing overhead
107
Total variable manufacturing costs per unit
$451
Fixed manufacturing overhead per year
$594,000
In addition, the company has fixed selling and administrative costs:
Fixed selling costs per year
$200,500
Fixed administrative costs per year
$102,400
During the year, Richetti produces 1,500 pairs of speakers and sells 1,200 pairs.
What is the value of ending inventory using variable costing?
Transcribed Image Text:Richetti produces stereo speakers. The selling price per pair of speakers is $1,800. There is no beginning inventory. Costs involved in production are: Direct material Direct labor $161 183 Variable manufacturing overhead 107 Total variable manufacturing costs per unit $451 Fixed manufacturing overhead per year $594,000 In addition, the company has fixed selling and administrative costs: Fixed selling costs per year $200,500 Fixed administrative costs per year $102,400 During the year, Richetti produces 1,500 pairs of speakers and sells 1,200 pairs. What is the value of ending inventory using variable costing?
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