Variable Costing, Value of Ending Inventory, Operating IncomePattison Products, Inc., began operations in October and manufactured 49,000 units during the month with the following unit costs:Direct materials$5.90Direct labor3.90Variable overhead1.95Fixed overhead*7.90Variable marketing cost1.65* Fixed overhead per unit = $387,100 / 49,000 units produced = $7.90Total fixed factory overhead is $387,100 per month. During October, 47,800 units were sold at a price of $28.25, and fixed marketing and administrative expenses were $122,500. Required:1. Calculate the cost of each unit using variable costing. Round your final answer to the nearest cent.11.75 V per unit2. How many units remain in ending inventory?1,200 v unitsWhat is the cost of ending inventory using variable costing?14,100Feedback3. Prepare a variable-costing income statement for Pattison Products, Inc., for the month of October.Pattison Products, Inc.Variable-Costing Income StatementFor the Month of OctoberSales1,350,350Less:Variable cost of goods sold561,650Variable marketing expense78,870Contribution margin709,830Less:Fixed factory overhead387,100Fixed marketing and administrative expenses122,500Operating income200,230Feedback4. What if November production was 49,000 units, costs were stable, and sales were 50,000 units? What is the cost of ending inventory? If an amount is zero, enter "0".What is operating income for November?232,900 V

Name: Variable Costing, Value of Ending Inventory, Operating IncomePattison
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Description: Variable Costing, Value of Ending Inventory, Operating IncomePattison Products, Inc., began operations in October and manufactured 49,000 units during the month with the following unit costs:Direct materials$5.90Direct labor3.90Variable overhead1.95F

Ending inventory is computed by adding the beginning inventory and purchases and then subtracting…

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Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 4CE: Refer to Cornerstone Exercise 18.3. Required: 1. Calculate the cost of each unit using variable...

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Variable Costing, Value of Ending Inventory, Operating Income

Pattison Products, Inc., began operations in October and manufactured 49,000 units during the month with the following unit costs:

Direct materials	$5.90
Direct labor	3.90
Variable overhead	1.95
Fixed overhead^*	7.90
Variable marketing cost	1.65

^* Fixed overhead per unit = $387,100 / 49,000 units produced = $7.90

Total fixed factory overhead is $387,100 per month. During October, 47,800 units were sold at a price of $28.25, and fixed marketing and administrative expenses were $122,500.

Required:
1. Calculate the cost of each unit using variable costing. Round your final answer to the nearest cent.
11.75 V per unit
2. How many units remain in ending inventory?
1,200 v units
What is the cost of ending inventory using variable costing?
14,100
Feedback
3. Prepare a variable-costing income statement for Pattison Products, Inc., for the month of October.
Pattison Products, Inc.
Variable-Costing Income Statement
For the Month of October
Sales
1,350,350
Less:
Variable cost of goods sold
561,650
Variable marketing expense
78,870
Contribution margin
709,830
Less:
Fixed factory overhead
387,100
Fixed marketing and administrative expenses
122,500
Operating income
200,230
Feedback
4. What if November production was 49,000 units, costs were stable, and sales were 50,000 units? What is the cost of ending inventory? If an amount is zero, enter "0".
What is operating income for November?
232,900 V

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