Question
Beach Corporation, which produces a single product, budgeted the following costs for its first year of operations. These costs are based on a budgeted volume
Beach Corporation, which produces a single product, budgeted the following costs for its first year of operations. These costs are based on a budgeted volume of 30,000 towels produced and sold:
Direct materials | $96,000 |
Direct labor | $48,000 |
Variable manufacturing overhead | $72,000 |
Fixed manufacturing overhead | $60,000 |
Variable selling and administrative expenses | $12,000 |
Fixed selling and administrative expenses | $36,000 |
During the first year of operations, Beach Corporation actually produced 30,000 towels but only sold 24,000 towels. Actual costs did not fluctuate from the cost behavior patterns described above. The 24,000 towels were sold for $16 per towel. Assume that direct labor is a variable cost. What is the total cost that would be assigned to Beach Corporation's finished goods inventory at the end of the first year of operations Under variable costing?
A) $43,200 B) $45,600 C) $55,200 D) $64,800
please give explanation with answer thank you.
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