Ceradyne 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		$5.00
Direct labor		3.00
Variable manufacturing overhead		2.00
Total variable manufacturing costs per unit		$10.00
Fixed manufacturing overhead per year		$223,100

In addition, the company has fixed selling and administrative costs of $155,200 per year. During the year, Ceradyne produces 48,500 snow shovels and sells 43,490 snow shovels.

What is the value of ending inventory using full costing?

Value of ending inventory

$

What is the value of ending inventory using variable costing?

Value of ending inventory

$

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

Difference in net income

$

What is cost of goods sold using full costing?

Cost of goods sold

$

What is cost of goods sold using variable costing?

Variable cost of goods sold

$

What is net income using full costing?

Net income

What is net income using variable costing?

Net income

$

How much fixed manufacturing overhead is in ending inventory under full costing?

Fixed manufacturing overhead in ending inventory

$

Compare this amount to the difference in the net incomes calculated in Exercise 5-13.

The amount of fixed manufacturing overhead in ending inventory under full costing is

equal togreater thanless than

the difference in net income between full costing and variable costing.