A company produces a single product. Variable production costs are $12 per unit and variable selling and administrative expenses are $3 per unit. Fixed manufacturing overhead totals $36,000 and fixed selling and administrative expenses total $40,000. Assuming a beginning inventory of zero, production of 4,000 units and sales of 3,600 units, the dollar value of the ending inventory under variable costing would be?

4800

To calculate the dollar value of the ending inventory under variable costing, we need to consider the per-unit variable production costs and variable selling and administrative expenses.

1. Calculate the total variable production costs:
Variable production costs per unit * Number of units produced
$12 * 4,000 = $<<12*4000=48000>>48,000

2. Calculate the total variable selling and administrative expenses:
Variable selling and administrative expenses per unit * Number of units sold
$3 * 3,600 = $<<3*3600=10800>>10,800

3. Calculate the variable cost of goods sold (COGS):
Total variable production costs + Total variable selling and administrative expenses
$48,000 + $10,800 = $<<48000+10800=58800>>58,800

4. Calculate the variable cost of ending inventory:
Total variable production costs - Variable cost of goods sold
$48,000 - $58,800 = -$10,800

Since the variable cost of ending inventory ($-10,800) is negative, it means that under variable costing, there is no ending inventory.

To calculate the dollar value of the ending inventory under variable costing, we need to understand the concept of variable costing and how it differs from absorption costing.

Variable costing is a method of inventory valuation that assigns only the variable production costs to the product. Under this method, fixed manufacturing overhead costs are treated as period expenses and are not included in the cost of inventory.

Here's how you can calculate the dollar value of the ending inventory under variable costing:

1. Calculate the total variable production costs:
Variable production cost per unit = $12
Total variable production costs = Variable production cost per unit × Number of units produced

Total variable production costs = $12 × 4,000 units

2. Calculate the total variable selling and administrative expenses:
Variable selling and administrative expenses per unit = $3
Total variable selling and administrative expenses = Variable selling and administrative expenses per unit × Number of units sold

Total variable selling and administrative expenses = $3 × 3,600 units

3. Calculate the total variable cost of goods sold (COGS):
Total variable COGS = Total variable production costs + Total variable selling and administrative expenses

Total variable COGS = Total variable production costs + Total variable selling and administrative expenses

4. Calculate the ending inventory value:
Ending inventory under variable costing = Total variable COGS - Total variable expenses (selling and administrative)

Now let's calculate the ending inventory value:

1. Total variable production costs = $12 × 4,000 units = $48,000
2. Total variable selling and administrative expenses = $3 × 3,600 units = $10,800
3. Total variable COGS = $48,000 + $10,800 = $58,800
4. Ending inventory under variable costing = $58,800 - $10,800 = $48,000

Therefore, the dollar value of the ending inventory, under variable costing, would be $48,000.