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Question - Laramie 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, Laramie produces 54,600 snow shovels and sells 49,950 snow shovels.
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