Reference no: EM132620255
Penny Worth Manufacturing produces snow shovels. The selling price per snow shovel is $27.00. There is no beginning inventory.
Costs involved in production are:
Direct material $4.00
Direct labor 4.00
Variable manufacturing overhead 2.00
Total variable manufacturing costs per unit $10.00
Fixed manufacturing overhead per year $179,900
In addition, the company has fixed selling and administrative costs of $154,500 per year.
During the year, Penny Worth produces 51,400 snow shovels and sells 45,930 snow shovels.
Question 1: What is the value of ending inventory using full costing?
Question 2: What is the value of ending inventory using variable costing?
Question 3: Calculate the difference in full costing net income and variable costing net income without preparing either income statement.
Question 4: What is cost of goods sold using full costing?
Question 5: What is cost of goods sold using variable costing?
Question 6: What is net income using full costing?
Question 7: What is net income using variable costing?
Question 8: How much fixed manufacturing overhead is in ending inventory under full costing?
The amount of fixed manufacturing overhead in ending inventory under full costing is greater than/less than/equal to the difference in net income between full costing and variable costing