Reference no: EM133001737

Laramie Manufacturing produces snow shovels. The selling price per snow shovel is $ 29.00. 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 $ 233,550

• In addition, the company has fixed selling and administrative costs of $ 162,400 per year.
• During the year, Laramie produces 51,900 snow shovels and sells 46,500 snow shovels.

Problem 1: What is the value of ending inventory using full costing?

Problem 2: What is the value of ending inventory using variable costing?

Problem 3: Calculate the difference in full costing net income and variable costing net income without preparing either income statement.