Preston Racquets manufactures tennis racquets.The following data are available for last month. $$\begin{array} { | l | r | }
\hline \text { Units in bepinging inventory } & 0 \
\hline \text { Units produced during year } & 1,200 \text { racquets } \
\hline \text { Units in ending inventory } & \text { 200 racquets } \
\hline \text { Sales comrissions per racquet } & \$ 10.00 \
\hline \text { Fixed manufacturing coverhead } & \$ 48,000 \
\hline \text { Fixed marketing expenses } & \$ 12,000 \
\hline \text { Selling price per racquet } & \$ 200 \
\hline \text { Variable manufacturing cost per racquet } & \$ 110 \
\hline
\end{array}$$
-Using variable costing,what is variable cost of goods sold for last month?

Question

Preston Racquets manufactures tennis racquets.The following data are available for last month. $$\begin{array} { | l | r | } 
\hline \text { Units in bepinging inventory } & 0 \
\hline \text { Units produced during year } & 1,200 \text { racquets } \
\hline \text { Units in ending inventory } & \text { 200 racquets } \
\hline \text { Sales comrissions per racquet } & \$ 10.00 \
\hline \text { Fixed manufacturing coverhead } & \$ 48,000 \
\hline \text { Fixed marketing expenses } & \$ 12,000 \
\hline \text { Selling price per racquet } & \$ 200 \
\hline \text { Variable manufacturing cost per racquet } & \$ 110 \
\hline
\end{array}$$ 
-Using variable costing,what is variable cost of goods sold for last month?

Quizplus · Accepted Answer

Variable costing only considers the variable costs of producing the goods, which in this case include direct materials, direct labor, and variable manufacturing overhead. The given data only provides information on these variable costs, so we cannot include any fixed manufacturing overhead costs in our calculation. The total variable costs for last month were $110,000 ($50,000 direct materials + $30,000 direct labor + $30,000 variable manufacturing overhead), so the variable cost of goods sold for last month is also $110,000.

Preston Racquets Manufactures Tennis Racquets -Using Variable Costing,what Is Variable Cost of Goods Sold for Last