Question
Nadira, Inc. produces e-readers that it sells for $80 each. Costs involved in production are: Direct material Direct labor Variable manufacturing overhead Fixed manufacturing overhead
Nadira, Inc. produces e-readers that it sells for $80 each. Costs involved in production are: Direct material Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year In addition, the company has selling and administrative costs: Fixed selling costs per year Fixed administrative costs per year $11 per unit 15 per unit 12 per unit $448,000 $175,000 75,000 Variable selling and administrative costs per year $6 per unit During the year, Nadira produced 28,000 readers and sold 29,400. Beginning inventory totaled 1,800 units. Assume the same unit costs in all years. a. What is the value of ending inventory using variable costing? b. How much is net income using variable costing? c. How much is net income using full costing? d. How much fixed manufacturing overhead is in ending inventory under full costing
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