Question
Walla Walla Manufacturing produces snow shovels. The selling price per snow shovel is $33.00. There is no beginning inventory. Costs involved in production are: Direct
Walla Walla Manufacturing produces snow shovels. The selling price per snow shovel is $33.00. There is no beginning inventory.
Costs involved in production are: | ||
Direct material | $5.00 | |
Direct labor | 5.00 | |
Variable manufacturing overhead | 4.00 | |
Total variable manufacturing costs per unit | $14.00 | |
Fixed manufacturing overhead per year | $155,150 |
In addition, the company has fixed selling and administrative costs of $154,600 per year. During the year, Walla Walla produces 53,500 snow shovels and sells 48,350 snow shovels.
Exercise 5.11
What is the value of ending inventory using full costing?
Value of ending inventory | $87035 |
Exercise 5.12
What is the value of ending inventory using variable costing?
Value of ending inventory | $72100 | |
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Part III
Calculate the difference in full costing net income and variable costing net income without preparing either income statement.
Difference in net income | $14,935 |
Part IV
What is cost of goods sold using full costing?- $817115
Part V
What is cost of goods sold using variable costing? - $676,900
Part VI
What is net income using full costing? 6,23,825
Part VII
What is net income using variable costing?
Net Income $ _______?
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