During January, DAC Inc. produced 5,000 units of product with costs as follows: Direct materials $40,000 Direct labour 22,000 Variable overhead 10,000 Fixed overhead 90,000 $162,000 At the end of January, there were 1,000 units of the product left in closing inventory. What is the value of closing inventory under variable costing?

During January, DAC Inc. produced 5,000 units of product with costs as follows: Direct materials $40,000 Direct labour 22,000 Variable overhead 10,000 Fixed overhead 90,000 $162,000 At the end of January, there were 1,000 units of the product left in closing inventory. What is the value of closing inventory under variable costing?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Dion Company reports the absorption costing income statement below for May. The company began the month with no finished goods inventory. Dion produced 21,800 units, and 2,900 units remain in ending finished goods inventory for May. Fixed overhead was $43,600. Variable selling and administration expenses were $39,000 and fixed selling and administrative expenses were $19,400. Sales (18,900 units) $ 378,000 Cost of goods sold 294,000 Gross profit 84,000 Selling and administrative expenses 58,400 Income $ 25,600 Prepare an income statement using variable costing.
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A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (19,200 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Operating expenses: Variable operating expenses $174,500 232,600 249,000 104,200 $760,300 $134,700 43,300 Fixed operating expenses 178,000 If 1,700 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet is O a. $67,318 O b. $70,019 O c. $58,089 O d. $83,079
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