Reference no: EM132637607

Tarjee Manufacturing produces snow shovels. The selling price per snow shovel is $32.00. There is no beginning inventory.

Costs involved in production are:

Direct material $5.00
Direct labor 4.00
Variable manufacturing overhead 4.00
Total variable manufacturing costs per unit $13.00
Fixed manufacturing overhead per year $196,560
In addition, the company has fixed selling and administrative costs of $170,400 per year.

During the year, Tarjee produces 54,600 snow shovels and sells 49,950 snow shovels.

Problem 1: What is the value of ending inventory using full costing?

Problem 2: What is the value of ending inventory using variable costing?

Problem 3: Calculate the difference in full costing net income and variable costing net income without preparing either income statement.

Problem 4: What is cost of goods sold using full costing?

Problem 5: What is cost of goods sold using variable costing?

Problem 6: What is net income using full costing?

Problem 7: What is net income using variable costing?

Problem 8: How much fixed manufacturing overhead is in ending inventory under full costing?

Problem 9: Compare this amount to the difference in the net incomes calculated