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    Summit Manufacturing, Inc - Full & Variable Costing

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    Summit Manufacturing, Inc. produces snow shovels.The selling price per snow shovel is $30.

    Costs involved in production are:

    Direct material $ 5

    Direct labor 4
    Variable manufacturing overhead 3

    Total variable manufacturing costs per unit $ 12

    Fixed manufacturing overhead per year $180,000

    In addition, the company has fixed selling and administrative costs of $160,000 per year.

    EXERCISE 5-11. [LO 1] During the year,Summit produces 40,000 snow shovels and sells 37,000
    snow shovels.

    Required
    What is the value of ending inventory using full costing?

    EXERCISE 5-12. [LO 1, 2] During the year, Summit produces 40,000 snow shovels and sells
    37,000 snow shovels.

    Required

    What is the value of ending inventory using variable costing?

    EXERCISE 5-13. [LO 1, 2, 3] During the year, Summit produces 40,000 snow shovels and sells
    37,000 snow shovels.

    Required

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

    EXERCISE 5-14. [LO 1] During the year,Summit produces 40,000 snow shovels and sells 37,000
    snow shovels.

    Required

    What is cost of goods sold using full costing?

    EXERCISE 5-15. [LO 1, 2] During the year, Summit produces 40,000 snow shovels and sells
    37,000 snow shovels.

    Required

    What is variable cost of goods sold?

    EXERCISE 5-16. [LO 1] During the year,Summit produces 40,000 snow shovels and sells 37,000
    snow shovels.

    Required

    What is net income using full costing?

    EXERCISE 5-17. [LO 1, 2] During the year, Summit produces 40,000 snow shovels and sells
    37,000 snow shovels.

    Required

    What is net income using variable costing?

    EXERCISE 5-18. [LO 1, 2, 3] During the year, Summit produces 40,000 snow shovels and sells
    37,000 snow shovels.

    Required

    How much fixed manufacturing overhead is in ending inventory under full costing? Compare this amount to the difference in the net incomes calculated in Exercise 5-13.

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    https://brainmass.com/business/product-costing/summit-manufacturing-inc-full-variable-costing-362494

    Solution Summary

    The solution computes value of ending inventory using variable costing, cost of goods sold using full costing, variable cost of goods sold, net income using variable costing & full costing,fixed manufacturing overhead .

    $2.19