Question
Oak RidgeManufacturing produces snow shovels. The selling price per snow shovel is $33.00. There is no beginning inventory. Costs involved in production are: Direct material
Oak RidgeManufacturing produces snow shovels. The selling price per snow shovel is $33.00. There is no beginning inventory.
Costs involved in production are:
Direct material
$5.00Direct labor
3.00Variable manufacturing overhead
4.00Total variable manufacturing costs per unit
$12.00Fixed manufacturing overhead per year
$119,340
In addition, the company has fixed selling and administrative costs of $158,500per year.
During the year,Oak Ridgeproduces45,900snow shovels and sells40,860snow shovels.
Calculate the difference in full costing net income and variable costing net income without preparing either income statement.
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