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Question - Canarie Manufacturing produces snow shovels. The selling price per snow shovel is $29.00. There is no beginning inventory.
Costs involved in production are:
Direct material $4.00
Direct labor 4.00
Variable manufacturing overhead 3.00
Total variable manufacturing costs per unit $11.00
Fixed manufacturing overhead per year $233,550
In addition, the company has fixed selling and administrative costs of $162,400 per year.
During the year, Canarie produces 51,900 snow shovels and sells 46,500 snow shovels.
Calculate the difference in full costing net income and variable costing net income without preparing either income statement. Difference in net income.
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