Dylan, manager of Burkley Company, is using a variable costing system to evaluate the company's performance. The company uses standard costing and budgeted to produce 5,000 units with a budgeted cost of $25,000 of fixed MOH and $20 per unit of variable manufacturing costs. Because of supply chain issues, the company was only able to produce 3,500 units with fixed MOH incurred of $17,850. However, they did sell all the units produced, plus the 600 units in beginning inventory. Assuming no changes in costs from last year to this year, how much will Dylan show on Burkley Company's report for its COGS this year? How much will be recognized for a fixed MOH volume variance?

Question

Quizplus · Accepted Answer

The Answer of Dylan, manager of Burkley Company, is using a variable costing system to evaluate the company's performance. The company uses standard costing and budgeted to produce 5,000 units with a budgeted cost of $25,000 of fixed MOH and $20 per unit of variable manufacturing costs. Because of supply chain issues, the company was only able to produce 3,500 units with fixed MOH incurred of $17,850. However, they did sell all the units produced, plus the 600 units in beginning inventory. Assuming no changes in costs from last year to this year, how much will Dylan show on Burkley Company's report for its COGS this year? How much will be recognized for a fixed MOH volume variance?

Dylan, Manager of Burkley Company, Is Using a Variable Costing