Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger

Exercise 11

Inventory Valuation under Variable Costing
Daltin Company produced 50,000 units during its first year of operations and sold 48,900 at $12 per unit. The company chose practical activity-at 50,000 units-to compute its predetermined overhead rate. Manufacturing costs are as follows:
Required:
1. Calculate the cost of one unit of product under variable costing.
2. Calculate the cost of ending inventory under variable costing.