Trio Company reports the following information for its first year of operations.

 Trio Company reports the following information for its first year of operations.
 
Direct materials     $ 13     per unit
Direct labor     $ 19     per unit
Variable overhead     $ 4     per unit
Fixed overhead     $ 253,550     per year
Units produced     23,050     units
Units sold     18,000     units
Ending finished goods inventory     5,050     units
Exercise 6-2 (Algo) Computing unit and inventory costs under variable costing LO P1

Assume instead that Trio Company uses variable costing.

1. Compute the product cost per unit using variable costing.

2. Determine the cost of ending finished goods inventory using variable costing.

3. Determine the cost of goods sold using variable costing.

 

Explanation

2.
Cost of ending finished goods inventory using variable costing:
5,050 units × $36 per unit = $181,800
 
3.
Cost of goods sold using variable costing:
18,000 units × $36 per unit = $648,000