Peterson Corporation produces a single product.Data from the company's records for last year follow: Under variable costing the value of the ending finished goods inventory would be:
A)$90, 000
B)$104, 000
C)$105, 000
D)$135, 000

Question

Peterson Corporation produces a single product.Data from the company's records for last year follow:  Under variable costing the value of the ending finished goods inventory would be:
A)$90, 000 
B)$104, 000 
C)$105, 000 
D)$135, 000

Quizplus · Accepted Answer

Units in ending inventory = Units in beginning inventory + Units produced - Units sold
= 0 units + 70, 000 units - 60, 000 units = 10, 000 units
Variable manufacturing cost per unit = $630, 000 ÷ 70, 000 units = $9 per unit
Variable costing ending finished goods inventory = 10, 000 units × $9 per unit = $90, 000

Peterson Corporation Produces a Single Product