The following information pertains to Stark Corporation:

-Refer to Figure 8-9. What is the value of ending inventory using the variable costing method?
A) $310,000
B) $250,000
C) $200,000
D) $390,000

Question

The following information pertains to Stark Corporation:
 
-Refer to Figure 8-9. What is the value of ending inventory using the variable costing method?
A) $310,000 
B) $250,000 
C) $200,000 
D) $390,000

Quizplus · Accepted Answer

Variable costing includes only variable manufacturing costs in the cost of inventory. Given that fixed manufacturing overhead is not included in inventory costs under variable costing, the ending inventory value would be lower compared to full absorption costing, which includes both variable and fixed manufacturing costs. Without the specific details from Figure 8-9, the correct answer is based on understanding the concept of variable costing.

The Following Information Pertains to Stark Corporation