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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

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.