The following information is available for Richardson Company for its first year of operations: Sales in units 5,000 Production in units 8,000 Manufacturing costs: Direct labor $3 per unit Direct material $5 per unit Variable overhead $1 per unit Fixed overhead $100,000 Net income (absorption method) $30,000 Sales price per unit $40 Refer to Richardson Company. If Richardson Company were using
variable costing, what would it show as the value of ending inventory?
a. $120,000
b. $64,500
c. $27,000
d. $24,000
C
3,000 units * $9.00/unit = $27,000
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