Variable Costing, Value of Ending Inventory, Operating Income

Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month with the following unit costs:

Direct materials	$5.00
Direct labor	3.00
Variable overhead	1.50
Fixed overhead*	7.00
Variable marketing cost	1.20

^* Fixed overhead per unit = $280,000 / 40,000 units produced = $7.

Total fixed factory overhead is $280,000 per month. During October, 38,400 units were sold at a price of $24, and fixed marketing and administrative expenses were $130,500.

Required:

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1. Calculate the cost of each unit using variable costing. Round your final answer to the nearest cent.

$fill in the blank 6fd8f4fa7076f99_1 per unit

2. How many units remain in ending inventory? fill in the blank 6fd8f4fa7076f99_2 units

What is the cost of ending inventory using variable costing? $fill in the blank 6fd8f4fa7076f99_3

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3. Prepare a variable-costing income statement for Pattison Products, Inc., for the month of October.

Pattison Products, Inc. Variable-Costing Income Statement For the Month of October

CashFixed costsSalesVariable costs	$- Select -
Less:
Fixed factory overheadFixed marketing and administrative expensesSalesVariable cost of goods sold	- Select -
Fixed factory overheadFixed marketing and administrative expensesSalesVariable marketing expense	- Select -
Contribution margin	$fill in the blank 3a17edfdb060f85_7
Less:
Fixed factory overheadSalesVariable cost of goods soldVariable marketing expense	- Select -
Fixed marketing and administrative expensesSalesVariable cost of goods soldVariable marketing expense	- Select -
Operating income	$fill in the blank 3a17edfdb060f85_12

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4. What if November production was 40,000 units, costs were stable, and sales were 41,000 units? What is the cost of ending inventory? $fill in the blank 1e2f3c051053072_1

What is operating income for November? $fill in the blank 1e2f3c051053072_2

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