Reference no: EM133003659

Question - Accustart Manufacturing produces snow shovels. The selling price per snow shovel is $28.00. There is no beginning inventory.

Costs involved in production:

Direct material $6.00

Direct labor $4.00

Variable manufacturing overhead $4.00

Total variable manufacturing costs per unit $14.00

Fixed manufacturing overhead per year $196,560

In addition, the company has a fixed selling and administrative cost of $170,900 per year. During the year, Accustart produces 50,400 shovels and sells 45,390 shovels.

Value of ending inventory using full costing $89,679.

Value of ending inventory using variable costing $70,140.

Calculate the difference in full costing net income and variable costing net income without preparing either income statement.