Figure 8-5. Sanders Company has the following information for 2011:
There were no beginning inventories.
Refer to Figure 8-5.What is the cost of ending inventory for Sanders using the variable costing method?
A)$300,000
B)$280,000
C)$120,000
D)$260,000

Question

Figure 8-5. Sanders Company has the following information for 2011:
 There were no beginning inventories.
Refer to Figure 8-5.What is the cost of ending inventory for Sanders using the variable costing method?
A)$300,000 
B)$280,000 
C)$120,000 
D)$260,000

Quizplus · Accepted Answer

Using the variable costing method, only variable manufacturing costs are included in the cost of goods sold. Therefore, the ending inventory consists of only fixed manufacturing costs, which is $260,000.