Steele Corporation has the following information for January, February, and March:
Production costs per unit (based on 10,000 units) are as follows:
There were no beginning inventories for January, and all units were sold for $50. Costs are stable over the three months.
-Refer to Figure 8-8. What is the March ending inventory for Steele Corporation using the variable costing method?
A) $120,000
B) $104,000
C) $260,000
D) $15,000

Question

Steele Corporation has the following information for January, February, and March:
  Production costs per unit (based on 10,000 units) are as follows:
  There were no beginning inventories for January, and all units were sold for $50. Costs are stable over the three months.
-Refer to Figure 8-8. What is the March ending inventory for Steele Corporation using the variable costing method?
A) $120,000 
B) $104,000 
C) $260,000 
D) $15,000

Quizplus · Accepted Answer

Under the variable costing method, only variable costs are included in inventory valuation. Fixed manufacturing overhead is treated as a period cost and expensed in the period incurred. The information provided in the question (Figure 8-8) is not visible, but based on the answer provided, it can be inferred that the calculation for the March ending inventory using variable costing leads to $104,000. This would typically involve subtracting the variable costs associated with the units sold from the total variable costs of all units available for sale.

Steele Corporation Has the Following Information for January, February, and March