Inventory Valuation under Variable Costing During the most r

Inventory Valuation under Variable Costing

During the most recent year, Judson Company had the following data associated with the product it makes:

Required:

1. How many units are in ending inventory?

$ _______ units

2. Using variable costing, calculate the per-unit product cost.

3. What is the value of ending inventory under variable costing?

Units in beginning inventory	300
Units produced	15,000
Units sold ($300 per unit)	12,700
Variable costs per unit:
Direct materials	$20
Direct labor	$60
Variable overhead	$12
Fixed costs:
Fixed overhead per unit produced	$30
Fixed selling and administrative	$140,000

1)Ending Units = Beginning Units +Units produced -Units sold

= 300 +15000 - 12700

= 2600 Units

2)Per Unit product cost =Direct material +Direct labor +Variable overhead

= 20+60+12

= $ 92 Per Unit

3)value of ending inventory under variable costing = Per unit cost* Ending units

= 92*2600

= $ 239,200