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Question - Oak Ridge Manufacturing produces snow shovels. The selling price per snow shovel is $33.00. There is no beginning inventory.
Costs involved in production are:
Direct material $5.00
Direct labor 3.00
Variable manufacturing overhead 4.00
Total variable manufacturing costs per unit $12.00
Fixed manufacturing overhead per year $119,340
In addition, the company has fixed selling and administrative costs of $158,500 per year.
During the year, Oak Ridge produces 45,900 snow shovels and sells 40,860 snow shovels.
Find the value of ending inventory using variable costing?
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