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During 2021 Snow produced 30,000 units and sold 27,000 units at a price of $90 per unit. Fixed factory overhead is applied based on production. Costs for last year were as follows:
Variable costs per unit
Direct materials $20Direct labour $10Variable overhead $2Variable selling $3
Fixed costs
Manufacturing cost $330,000
Selling and administration $120,000
-What is the cost of ending inventory on the balance sheet if Snow is using absorption costing?
-What is the cost of ending inventory on the balance sheet if Snow is using variable costing?
-Determine income for Snow. Assume Snow is using absorption costing. Show workings.
-Calculate net income for Snow. Assume Snow is using variable costing.
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