McFadden,Inc What Is the Ending Balance in Finished Goods Inventory Using

question 19

Multiple Choice

McFadden,Inc.has collected the following data.(There are no beginning inventories. ) $$\begin{array} { | l | r | r|} \hline \text { Units produced } &700 &{ \text { units } } \\\hline \text { Sales price } & \$ 150 &\text { per unit } \\\hline \text { Direct materials } & \$ 30& \text { per unit } \\\hline \text { Direct labor } & \$ 10 &\text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 10& \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 17,300 &\text { per year } \\\hline \text { Variable selling and administrative costs } & \$ 6 &\text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 17,200& \text { per year } \\\hline\end{array}$$ What is the ending balance in Finished Goods Inventory using variable costing if 600 units are sold?

• A)$4,000
• B)$5,000
• C)$2,000
• D)$3,000

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Definitions:

Limitations

Constraints or restrictions, often referring to the boundaries or shortcomings of a concept, system, or process.

Internal User

Individuals within an organization, such as managers and employees, who use the company's financial information for decision making and operational purposes.

Accounting Data

Information and records relating to the financial transactions of a business.

Accounting Process

The systematic series of steps undertaken to record, classify, and summarize financial transactions and present financial statements.