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Problem - Inventory Valuation under Variable Costing - Lane Company produced 50,000 units during its first year of operations and sold 47,300 at $12 per unit. The company chose practical activity-at 50,000 units-to compute its predetermined overhead rate. Manufacturing costs are as follows:
Direct materials $120,000
Direct labor 93,000
Variable overhead 65,000
Fixed overhead 51,000
Required -
1. Calculate the cost of one unit of product under variable costing.
2. Calculate the cost of ending inventory under variable costing.
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