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Duffy Dog Manufacturing produces snow shovels. The selling price per snow shovel is $28.00. There is no beginning inventory.
Costs involved in production are:
Direct material $5.00
Direct labor 4.00
Variable manufacturing overhead 3.00
Total variable manufacturing costs per unit $12.00
Fixed manufacturing overhead per year $245,180
In addition, the company has fixed selling and administrative costs of $144,800 per year. During the year, Duffy Dog produces 53,300 snow shovels and sells 48,010 snow shovels.
Problem 1: How much fixed manufacturing overhead is in ending inventory under full costing?
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