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    Youngstown Manufacturing: variable costing

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    Consider the following information pertaining to a year's operations of Youngstown Manufacturing:

    Units sold 1,400
    Units produced 1,600
    Direct labor $4,200
    Direct materials used 3,500
    Fixed manufacturing overhead 2,200
    Variable manufacturing overhead 300
    Selling and administrative expenses (all fixed) 700
    Beginning inventories 0
    Contribution margin 5,600
    Direct-material inventory, end 800

    There are no work-in-process inventories.
    1. What is the ending finished-goods inventory cost under absorption costing?
    2. What is the ending finished-goods inventory cost under variable costing?

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    https://brainmass.com/business/accounting/youngstown-manufacturing-variable-costing-252615

    Solution Preview

    1. What is the ending finished-goods inventory cost under absorption costing?

    Under absorption costing, all manufacturing costs are taken as product cost
    Total cost of production is
    Direct labor $4,200
    Direct materials ...

    Solution Summary

    The solution explains how to calculate the value of ending inventory under variable costing and absorption costing.

    $2.19

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