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Question - Steering Manufacturing produces snow shovels. The selling price per snow shovel is $31.00. There is no beginning inventory.
Costs involved in production are:
Direct material $4.00
Direct labor $ 4.00
Variable manufacturing overhead $3.00
Total variable manufacturing costs per unit $11.00
Fixed manufacturing overhead per year $180,200
In addition, the company has fixed selling and administrative costs of $162,600 per year.
During the year, Steering produces 53,000 snow shovels and sells 48,270 snow shovels.
Required - What is the value of ending inventory using full costing?
Reflect explain which financial ratios would be applicable to the company and which would not. State the reasons for your assertions.
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