Carla Vista Company sells its product for

Carla Vista Company sells its product for $26 per unit. During 2022, it
produced 24500 units and sold 14000 units (there was no beginning
inventory). Costs per unit are: direct materials $5, direct labour $4, and
variable overhead $3. Fixed costs are: $294000 manufacturing overhead,
and $98000 selling and administrative expenses. Ending inventory under
variable costing is


(a) Product cost per unit:
Variable costing unit product cost:
Direct materials $5
Direct labour 4
Variable overhead 3
Unit product cost $12
(b) Units in ending inventory:
Beginning inventory 0
Add: Units produced 24,500 units
Less: Units sold 14,000 units
Units in ending inventory 10,500 units
(c) Value of ending inventory under variable costing:
Units in ending inventory 10,500 units
× Product cost per unit $12
= Value of ending inventory $126,000