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Ceradyne 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 $5.00
Direct labor 3.00
Variable manufacturing overhead 2.00
Total variable manufacturing costs per unit $10.00
Fixed manufacturing overhead per year $223,100
In addition, the company has fixed selling and administrative costs of $155,200 per year.
Problem 1: During the year, Ceradyne produces 48,500 snow shovels and sells 43,490 snow shovels. What is the value of ending inventory using full costing?
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