Question

Exercise 06-2 Computing unit and inventory costs under variable costing LO P1 Trio Company reports the following information for the current year, which is its first year of operations. Assume instead that Trio Company uses variable costing $ 15 per unit 16 per unit Direct materials Direct labor Overhead costs for the year Variable overhead Fixed overhead Units produced this year Units sold this year Ending finished goods inventory in units 4 per unit $ 160,000 per year 20,800 units 14,000 units 6,800 units 1. Compute the product cost per unit using variable costing. Cost per unit of finished goods using: Variable costing Cost per unit of finished goods SO 2. Determine the cost of ending finished goods inventory using variable costing.

Answer 1

Production cost per unit using variable costing Direct Material 15 per unit Direct labour 16 per unit Variable overhead $ 4 per unit Production cost per unit $ 35 per unit 2 Cost of Ending finished goods inventory using variable costing No of units of finished goods 6000 units Cost per unit $35 $ 210,000 Cost of goods sold using variable costing No of units in goods sold 14000 units Cost per unit $35 $ 490,000