Groovelex Inc.reports the following information:
- There are no beginning inventories.What is the ending balance in finished goods inventory using variable costing?
A)$2,500
B)$7,000
C)$5,000
D)$6,000

Question

Groovelex Inc.reports the following information: 
- There are no beginning inventories.What is the ending balance in finished goods inventory using variable costing?
A)$2,500 
B)$7,000 
C)$5,000 
D)$6,000

Quizplus · Accepted Answer

Variable costing does not include fixed manufacturing costs in inventory. Therefore, the ending balance in finished goods inventory is $2,500 (500 units x $5).

Groovelex Inc.reports the Following Information