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

question 34

Multiple Choice

McFadden,Inc.has collected the following data.(There are no beginning inventories.) $$\begin{array} { | l | r | } \hline \text { Units produced } & { 700 \text { units } } \\\hline \text { Sales price } & \$ 120 \text { per unit } \\\hline \text { Direct materials } & \$ 20 \text { per unit } \\\hline \text { Direct labor } & \$ 12 \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 5 \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 16,000 \text { per year } \\\hline \text { Variable selling and administrative costs } & \$ 6 \text { per unit } \\\hline \text { Fixed selling and administrative costs } & \$ 12,300 \text { per year } \\\hline\end{array}$$ What is the ending balance in Finished Goods Inventory using variable costing if 500 units are sold?

• A) $6,400
• B) $7,400
• C) $3,400
• D) $4,000

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