A business operated at 100% of capacity during its first month and incurred the following costs:Production costs (17,000 units): Direct materials$171,800 Direct labor237,700 Variable factory overhead269,300 Fixed factory overhead96,700$775,500 Operating expenses: Variable operating expenses$126,100 Fixed operating expenses40,700166,800If 1,900 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet isa.$89,959b.$75,867c.$86,674d.$105,316

Solution : Amount of inventory shown in balance sheet =(Computation of variable cost per unit *…

Answered: f 1,900 units remain unsold at the end…

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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A business operated at 100% of capacity during its first month and incurred the following costs:

Production costs (17,000 units):
Direct materials	$171,800
Direct labor	237,700
Variable factory overhead	269,300
Fixed factory overhead	96,700	$775,500

Operating expenses:
Variable operating expenses	$126,100
Fixed operating expenses	40,700	166,800

If 1,900 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet is

a.$89,959

b.$75,867

c.$86,674

d.$105,316

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