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

question 55

Multiple Choice

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

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

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Definitions:

Split-Off Point

The stage in a process where different products have been sufficiently processed and can be recognized as distinct goods.

Weighted Average Method

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the weighted average cost of all items available for sale during the period.

Joint Costs

The costs incurred in the process of producing two or more joint products before the point at which the products become separately identifiable.

Split-Off Point

In a production process, the stage at which jointly processed products become individually identifiable and able to be separated into distinct products.