The Following Information Pertains to Fondueland Corporation What Is the Value of Ending Inventory Using the Variable

question 3

Multiple Choice

The following information pertains to Fondueland Corporation: $\begin{array}{lr}\text { Beginning inventory } & 0 \text { units } \\\text { Ending inventory } & 5,000 \text { units } \\\text { Direct labor per unit } & \$ 20 \\\text { Direct materials per unit } & 16 \\\text { Variable overhead per } &\\\text { unit } &4 \\\text { Fixed overhead per unit } & 10 \\\text { Variable selling costs per } & 12 \\\text { unit } & \\\text { Fixed selling costs per } & 16 \\\text { unit } &\end{array}$ What is the value of ending inventory using the variable costing method?

• A)$310,000
• B)$250,000
• C)$390,000
• D)$200,000

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Definitions:

Actual Reserves

The total amount of funds that a bank has in its reserve account plus any cash on hand, used to satisfy central bank requirements and handle withdrawals.

Excess Reserves

Bank reserves exceeding the reserve requirements set by the central bank, available for lending.

Reserve Requirements

Rules established by central banks that specify the lowest reserve amount that banks are required to maintain against customer deposits.

Checking Accounts

Bank accounts on which the account holder can draw checks against the money deposited.