Fire master BBQ produces stainless steel propane gas grills.

The company has been in operation for three years, and sales have declined each year due to increased competition. The following information is available:

Required
a. Calculate profit and the value of ending inventory for each year under full costing.
b. Calculate profit and the value of ending inventory for each year under variable costing.
c. Explain how management of Firemaster could manipulate earnings in 2015 by producing more units than are actually needed to meet demand. Could this approach to earnings management be repeated year after year?

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2016 Total 25,000 82,000 22,000 82,000 2014 2015 30,000 30,000 27,000 30,000 Uniis so Units produced Fixed production costs Variable production costs $30,000,000 $30,000,000 $30,000,000 per unit Selling price per unit Fixed selling and administrative $1,000 1,000 1,000 $2,500 2,500 2,500 expense $350,000 350,000 350,000