To find the dollar value of the ending inventory under variable costing, we need to determine the variable production cost per unit and then apply it to the units remaining in inventory.

Step 1: Calculate the Variable Cost per Unit

Under variable costing, only the variable production costs are used to value the ending inventory.

Given:

• Variable production cost per unit = $12.20

Step 2: Determine the Ending Inventory Units

Since the company produced 4,200 units but sold 3,700 units, the ending inventory is: $4,200 - 3,700 = 500 \text{ units}$

Step 3: Calculate the Ending Inventory Value

The ending inventory value under variable costing is calculated by multiplying the variable production cost per unit by the number of units in ending inventory.

$500 \text{ units} \times 12.20 = 6,100$

Answer

The dollar value of the ending inventory under variable costing is $6,100.

Correct Option: $\boxed{6,100}$

Would you like further details, or have any questions?

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1. What is the difference between variable and absorption costing for ending inventory?
2. How do fixed costs affect ending inventory in variable costing?
3. How would the ending inventory value change if production was higher or lower?
4. How is the total cost of goods sold calculated under variable costing?
5. Why might a company choose variable costing over absorption costing?

Tip: Under variable costing, only variable production costs are included in inventory valuation; fixed costs are treated as period expenses.