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Dawson Company incurred the following costs while producing 200 chairs: Units produced 200 chairs Direct materials $20 per unit Direct labor 25 per unit Variable manufacturing overhead 4 per unit Total fixed manufacturing overhead 3,000 Variable selling and administrative 5 per unit Fixed selling and administrative 4,000What is the ending balance in Finished Goods Inventory using variable costing if 170 units are sold (assume no beginning inventory in Finished Goods Inventory)?

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Answer:

The answer is: $1,470

Explanation:

To determine the ending balance of Dawson Company using the variable costing method, we must determine the total variable unit cost and multiply it by the number of units remaining in inventory.

total variable unit cost = direct materials + direct labor + variable overhead

total variable unit cost = $20 + $25 + $4 = $49

30 chairs left in ending inventory x $49 per chair = $1,470

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