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