Rosewood Corporation
Rosewood Corporation produces a single product.The following cost structure applied to its first year of operations:
Variable costs:
SG\&A $ 2 per unit
Prochuction $ 4 per unit
Fixed costs (total cost incurre dor the year):
SG\&A $ 14,000
Production $ 20.000

Refer to Rosewood Corporation.Assume for this question only that Rosewood Corporation manufactured 5,000 units and sold 4,000 in the current year.If Rosewood employs a costing system based on variable costs,the company would end the current year with a finished goods inventory of

Question

Rosewood Corporation
Rosewood Corporation produces a single product.The following cost structure applied to its first year of operations:
Variable costs:
SG\&A                    $ 2  per unit
Prochuction            $ 4  per unit
Fixed costs (total cost incurre dor the year):
SG\&A                     $ 14,000
Production                  $ 20.000

Refer to Rosewood Corporation.Assume for this question only that Rosewood Corporation manufactured 5,000 units and sold 4,000 in the current year.If Rosewood employs a costing system based on variable costs,the company would end the current year with a finished goods inventory of

Quizplus · Accepted Answer

Variable costing only includes variable costs in the cost of goods sold. In this case, the variable costs are $2 per unit for SG&A and $4 per unit for production, for a total of $6 per unit. Since 4,000 units were sold, the cost of goods sold is $24,000. The beginning finished goods inventory was 0, and 5,000 units were manufactured, so the ending finished goods inventory is 1,000 units. The cost of the ending finished goods inventory is $6,000 (1,000 units x $6 per unit).

Rosewood Corporation Rosewood Corporation Produces a Single Product.The Following Cost Structure Applied