required information\nuse the following information for the quick study below. (algo)\nthe following…

required information\nuse the following information for the quick study below. (algo)\nthe following information applies to the questions displayed below.\naces incorporated, a manufacturer of tennis rackets, began operations this year. the company produced 7,850 rackets\nand sold 5,830. each racket was sold at a price of $90. fixed overhead costs are $102,050 per year, and fixed selling and\nadministrative costs are $69,000 per year. the company also reports the following per unit variable costs for the year.\ndirect materials $ 12\ndirect labor 8\nvariable overhead 5\nvariable selling and administrative expenses 2\nqs 19 - 5 (algo) reporting inventory using variable costing lo p2\ncompute the cost of ending finished goods inventory reported on the balance sheet using variable costing.\n

required information\nuse the following information for the quick study below. (algo)\nthe following information applies to the questions displayed below.\naces incorporated, a manufacturer of tennis rackets, began operations this year. the company produced 7,850 rackets\nand sold 5,830. each racket was sold at a price of $90. fixed overhead costs are $102,050 per year, and fixed selling and\nadministrative costs are $69,000 per year. the company also reports the following per unit variable costs for the year.\ndirect materials $ 12\ndirect labor 8\nvariable overhead 5\nvariable selling and administrative expenses 2\nqs 19 - 5 (algo) reporting inventory using variable costing lo p2\ncompute the cost of ending finished goods inventory reported on the balance sheet using variable costing.\n

Answer

Explanation:

Step1: Calculate the number of ending inventory units

The number of ending inventory units = Units produced - Units sold. So, (7850 - 5830=2020) units.

Step2: Calculate the variable cost per unit

The variable cost per unit (= \text{Direct materials}+\text{Direct labor}+\text{Variable overhead}) (=12 + 8+5=$25) per unit.

Step3: Calculate the cost of ending finished goods inventory

The cost of ending finished goods inventory (=\text{Number of ending inventory units}\times\text{Variable cost per unit}) (=2020\times25=$50500)

Answer:

The cost of ending finished goods inventory reported on the balance sheet using variable costing is ($50500)