Managerial Accounting: E5-12 Summit Manufacturing - value of ending inventory using variable costing

Important Reminder!!! There might be other versions of this problem - amounts and dates have been changed - so please make sure you review and compare this tutorial to the problem in your homework. Even with different amounts, format and way of solving the problem is still the same so pleases be guided accordingly.

Managerial Accounting
The following information relates to Exercises 5-11 through 5-18:
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 5-12.
During the year, Summit produces 40,000 snow shovels and sells 37,000 snow shovels.
What is the value of ending inventory using variable costing?
Powered by