Preston Racquets manufactures tennis racquets. The following data are available for last month.

-Using variable costing, what is variable cost of goods sold at Preston Racquets for last month?
A) $22,000
B) $110,000
C) $10,000
D) $132,000

Question

Preston Racquets manufactures tennis racquets. The following data are available for last month.
 
-Using variable costing, what is variable cost of goods sold at Preston Racquets for last month?
A) $22,000 
B) $110,000 
C) $10,000 
D) $132,000

Quizplus · Accepted Answer

Variable costing only includes variable costs in the cost of goods sold calculation. From the given data, we can see that the variable cost per racquet is $100 ($40 direct materials + $30 direct labor + $30 variable manufacturing overhead). The total number of racquets produced and sold is 1,100. Therefore, the variable cost of goods sold is $100 x 1,100 = $110,000. Therefore, the correct answer is B.

Preston Racquets Manufactures Tennis Racquets