BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

Solutions

Chapter
Section
BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
1 views

Inventory Valuation under Variable Costing

Lane Company produced 50,000 units during its first year of operations and sold 47,300 at $12 per unit. The company chose practical activity—at 50,000 units—to compute its predetermined overhead rate. Manufacturing costs are as follows:

Chapter 3, Problem 53E, Inventory Valuation under Variable Costing Lane Company produced 50,000 units during its first year

Required:

  1. 1. Calculate the cost of one unit of product under variable costing.
  2. 2. Calculate the cost of ending inventory under variable costing.

1.

To determine

Compute the value of cost of per unit of product with the help of variable costing.

Explanation

Variable Cost:

Variable cost is the cost which varies due to the changes in the level of output to produce products and services in a relevant range.

Calculation of cost per unit with the help of variable costing:

Particulars

Amount

($)

(A)Direct material cost per unit12.46
(B)Direct labor cost per unit11.86
(C)Variable overhead per unit11.30
Total cost per unit (A+B+C)5.62

Table (1)

Therefore, total cost per unit of product is $5.62.

Working Note:

1

2.

To determine

Compute the cost of ending inventory with the help of variable costing.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

How does an increase in productivity affect business?

Foundations of Business (MindTap Course List)

IRR Refer to Problem 11-1. What is the projects IRR?

Fundamentals of Financial Management (MindTap Course List)

PAYBACK PERIOD Refer to Problem 11-1. What is the projects payback?

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)