Fruta manufactures industrial water tanks. The following data are for October 2006. The company had 5 units in beginning inventory. In October, 35 units were produced, and 20 were sold. The average selling price was $45,000. Variable Costs (per unit) Direct Materials $ 6000 Direct Labor 15,000 Variable Manufacturing Overhead 3,000 Variable selling and admin. 2,500 Fixed Costs (total) Manufacturing Overhead $ 240,000 Selling and admin. 100,000 

a) Compute the cost of ending inventory using variable costing. Assume that Fruta uses FIFO inventory costing and carries the beginning inventory at $24,500 variable cost per unit. 

b) Find the operating income for the month, using variable costing

Answer rating: 100% (QA)

a To compute the cost of ending inventory using variable costing we need to calculate the variable c... View the full answer