The following information pertains to Stark Corporation: $\begin{array}{lr}
\text { Beginning inventory} &0 \text { units }\
\text { Ending inventory} &5,000 \text { units }\
\text { Direct labour per unit } &\$20\
\text { Direct materials per unit} &16\
\text {Variable overhead per unit } &4\
\text {Fixed overhead per unit } &10\
\text { Variable selling costs per unit } &12\
\text {Fixed selling costs per unit } &16\
\end{array}$
What is the value of ending inventory using the variable costing method?
A)$200,000
B)$250,000
C)$310,000
D)$390,000

Question

The following information pertains to Stark Corporation: $\begin{array}{lr}
  \text {  Beginning inventory} &0 \text { units }\
 \text {  Ending inventory} &5,000 \text { units }\
 \text { Direct labour per unit } &\$20\
 \text {  Direct materials per unit} &16\
 \text {Variable overhead per unit  } &4\
 \text {Fixed overhead per unit  } &10\
 \text { Variable selling costs per unit } &12\
 \text {Fixed selling costs per unit  } &16\
\end{array}$
 What is the value of ending inventory using the variable costing method?
A)$200,000
B)$250,000
C)$310,000
D)$390,000

Quizplus · Accepted Answer

Variable costing includes only variable manufacturing costs in inventory. In this case, variable manufacturing costs are direct materials, direct labor, and variable overhead. So, the value of ending inventory using the variable costing method is:5,000 units * ($16 + $20 + $4) = $200,000

The Following Information Pertains to Stark Corporation What Is the Value of Ending Inventory Using the Variable