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A company produces a single product. Variable production costs are $12 per unit and variable selling and administrative expenses are $3 per unit. Fixed manufacturing overhead totals $36,000 and fixed selling and administration expenses total $40,000. Assuming a beginning inventory of zero, production of 4,000 units and sales of 3,600 units, the dollar value of the ending inventory under variable costing would be:

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Answer:

$4,800

Step-by-step explanation:

Given that,

Variable production costs = $12 per unit

Variable selling and administrative expenses = $3 per unit

Fixed manufacturing overhead = $36,000

Fixed selling and administration expenses = $40,000

Beginning inventory = 0

Units produced = 4,000 units

Units sold = 3,600 units

Ending inventory:

= Beginning inventory + Units produced - Units sold

= 0 + 4,000 - 3,600

= 400 units

Therefore, the dollar value of the ending inventory under variable costing would be:

= Ending inventory × Variable cost per unit

= 400 units × $12 per unit

= $4,800