Inventory Valuation under Variable Costing Astron Company produced erations and

Question

Inventory Valuation under Variable Costing Astron Company produced erations 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 Direct labour Variable overhead Fixed overhead Required: 1. Caloulate the cost of one unit of product under variable costing. Do not round your interim calculation. Round your answer to the nearest cent. Use rounded amount in subsequent requirement. 0,000 units during its first year of op $129,150 97,650 68,250 3,550 2. Caloulate the cost of ending inventory under variable costing, If required, round to the nearest dollar

Explanation / Answer

1.

2. Cost of ending inventory = 2,700 x $5.90 = $15,930

Direct materials $129,150 Direct labor 97,650 Variable overhead 68,250 Total variable cost $295,050 Units produced 50,000 variable cost per unit $5.90

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