Question

In: Accounting

Kennel Manufacturing produces snow shovels. The selling price per snow shovel is $28.00. There is no...

Kennel Manufacturing produces snow shovels. The selling price per snow shovel is $28.00. There is no beginning inventory.
Costs involved in production are:
Direct material $5.00
Direct labor 4.00
Variable manufacturing overhead 3.00
Total variable manufacturing costs per unit $12.00
Fixed manufacturing overhead per year $245,180

In addition, the company has fixed selling and administrative costs of $144,800 per year.

During the year, Kennel produces 53,300 snow shovels and sells 48,010 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 the difference in net income between full costing and variable costing.

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