Ron produces stereo speakers. The selling price per pair of speakers is $3,600. There is no beginning inventory. Costs involved in production are: Direct material $389 Direct labor 390 Variable manufacturing overhead 235 Total variable manufacturing costs per unit $857 Fixed manufacturing overhead per year $578,000 In addition, the company has fixed selling and administrative costs: Fixed selling costs per year $210,500 Fixed administrative costs per year $132,400 During the year, Ron produces 3,200 pairs of speakers and sells 2,950 pairs. What is the value of ending inventory using variable costing?

Ron produces stereo speakers. The selling price per pair of speakers is $3,600. There is no beginning inventory. Costs involved in production are: Direct material $389 Direct labor 390 Variable manufacturing overhead 235 Total variable manufacturing costs per unit $857 Fixed manufacturing overhead per year $578,000 In addition, the company has fixed selling and administrative costs: Fixed selling costs per year $210,500 Fixed administrative costs per year $132,400 During the year, Ron produces 3,200 pairs of speakers and sells 2,950 pairs. What is the value of ending inventory using variable costing?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual variable unit cost is as follows: Fixed overhead was 320,000. Fixed selling expenses consisted of advertising copayments totaling 110,000. Fixed administrative expenses were 236,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was 148,000 for 4,000 juicers. The value of ending inventory reported on the financial statements was a. 55,500 b. 92,500 c. 66,500 d. 39,900
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