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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
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 $ 608,900
Part VIII
How much fixed manufacturing overhead is in ending inventory under
full costing?
Fixed manufacturing overhead in ending inventory $__________
,—- please indicate here
Part IX
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
Greater then, Equal to, or less than the difference in net
income between full costing and variable costing ?
Also. please indicate if it is less, equal or greater.
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