A company reports the following information for its first year of operations.Direct materials$ 45per unitDirect labor$ 48per unitVariable overhead$ 12per unitFixed overhead$ 480,000 per yearUnits producedunitsUnits soldunitsunits20,00014,000Ending finished goods inventory 6,0001. Compute the product cost per unit using variable costing.2. Determine the cost of ending finished goods inventory using variable costing.3. Determine the cost of goods sold using variable costing.

The varaible costing is a method of costing wherein only variable costs are considered to calculate…

1. Compute the product cost per unit using variable costing. 2. Determine the cost of ending finished goods inventory using variable costing. 3. Determine the cost of goods sold using variable costing.

1. Compute the product cost per unit using variable costing. 2. Determine the cost of ending finished goods inventory using variable costing. 3. Determine the cost of goods sold 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 1E: At the end of the first year of operations, 21,500 units remained in the finished goods inventory....

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Question

A company reports the following information for its first year of operations.
Direct materials
$ 45
per unit
Direct labor
$ 48
per unit
Variable overhead
$ 12
per unit
Fixed overhead
$ 480,000 per year
Units produced
units
Units sold
units
units
20,000
14,000
Ending finished goods inventory 6,000
1. Compute the product cost per unit using variable costing.
2. Determine the cost of ending finished goods inventory using variable costing.
3. Determine the cost of goods sold using variable costing.

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