Waltman Company provided the following data for their metal brackets: Units in beginning finished goods inventory 900 Cost per unit ? Units produced 60,000 Units sold ($13.50 per unit) 56,000 Variable costs per unit produced: Direct materials $1.80 Direct labor 0.90 Variable overhead 0.30 Variable selling expenses (per unit sold) $0.10 Fixed costs: Fixed overhead incurred $216,000 Fixed selling and administrative $72,000

Using variable costing, answer the following:

1. Calculate the per-unit product cost (round to the nearest cent):

2. Calculate the units in ending finished goods inventory:

3. Calculate the cost of ending finished goods (round to the nearest dollar):

4. Prepare a variable costing income statement by completing the following table:

Waltman Company
Variable-Costing Income Statement
Sales:
Less variable expenses:
Variable cost of goods sold
Variable selling and administrative expenses
Contribution margin
Less fixed expenses
Fixed overhead
Fixed selling and administrative
Operating Income

Scenario 3

Reconcile the income using the variable costing versus absorption costing as calculated above:

Operating Income using Variable Costing
Fixed Overhead in Opening Inventory
Fixed Overhead in Ending Inventory
Change in fixed overhead
Operating income using Absorption Costing

Fixed Overhead in opening Inventory =

Fixed Overhead in ending inventory =