Variable costing with beginning inventory Tepco, Inc. manufactures garbage disposals. During 1993,22,000 units were manufactured and 19,000
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Variable costing with beginning inventory Tepco, Inc. manufactures garbage disposals. During 1993,22,000 units were manufactured and 19,000 units were sold. The price of the garbage disposal is $90. Variable manufacturing costs were $28 for materials, $16 for labor, and $8 for variable manufacturing overhead. Variable selling and administrative costs were $6 per unit sold, and fixed selling and administrative costs were $325,000. Budgeted and actual fixed manufactur- ing overhead was $200,000. Normal capacity is 20,000 units. Beginning inventory on January 1, 1993 was 5,000 units with a variable product cost of $48 per unit. Tepco uses the FIFO inventory method.
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