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A company produces a single product. Variable production costs are $21 per unit and variable selling and administrative expenses are $4 per unit. Fixed manufacturing overhead totals $30,000 and fixed selling and administration expenses total $36,000. Assuming a beginning inventory of zero, production of 6,000 units and sales of 5,600 units, the dollar value of the ending inventory under variable costing would be:

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Answer:

$8,400

Explanation:

The computation of the ending inventory under variable costing is shown below:

= Ending inventory units × variable production cost per unit

where,

Ending inventory units is

= 6,000 units - 5,600 units

= 400 units

And, the variable production cost per unit is $21 per unit

So, the ending inventory is

= 400 units × $21 per unit

= $8,400

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