Summit Manufacturing, Inc. produces snow shovels. The selling price per snow shovel is $30.
Costs involved in production are:
Direct material $5
Direct labor 4
Variable manufacturing overhead 3
Total variable manufacturing costs per unit $12
Fixed manufacturing overhead per year $180,000
In addition, the company has fixed selling and administrative costs of $160,000 per year.
EXERCISE 5-11. [LO 1] During the year, Summit produces 40,000 snow shovels and sells 37,000 snow shovels.
Required
What is the value of ending inventory using full costing?
EXERCISE 5-12. [LO 1, 2] During the year, Summit produces 40,000 snow shovels and sells 37,000 snow shovels.
Required
What is the value of ending inventory using variable costing?
EXERCISE 5-13. [LO 1, 2, 3] During the year, Summit produces 40,000 snow shovels and sells 37,000 snow shovels.
Required
Calculate the difference in full costing net income and variable costing net income without preparing either income statement.
EXERCISE 5-14. [LO 1] During the year, Summit produces 40,000 snow shovels and sells 37,000 snow shovels.
Required
What is cost of goods sold using full costing?
EXERCISE 5-15. [LO 1, 2] During the year, Summit produces 40,000 snow shovels and sells 37,000 snow shovels.
Required
What is variable cost of goods sold?
EXERCISE 5-16. [LO 1] During the year, Summit produces 40,000 snow shovels and sells 37,000 snow shovels.
Required
What is net income using full costing?
EXERCISE 5-17. [LO 1, 2] During the year, Summit produces 40,000 snow shovels and sells 37,000 snow shovels.
Required
What is net income using variable costing?
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