Selling price per pair of speakers 1,800$
Costs involved in production:
Direct material 150$
Direct labor 200
Variable manufacturing overhead 100
Total variable manufacturing costs per unit 450$
Fixed manufacturing overhead per year 600,000$
In addition, the company has fixed selling and administrative costs:
Fixed selling costs per year 210,000$
Fixed administrative costs per year 110,000$
During the year, the following number of speakers were produced and sold:
Number of pairs of speakers produced 1,500
Number of pairs of speakers sold 1,200
Exercise 5-4
Required
What is the value of ending inventory using full costing?
Exercise 5-5
Required
What is the value of ending inventory using variable costing?
Xenoc, Inc. produces stereo speakers. There is no beginning inventory. The selling price of the
speakers is:
Exercise 5-4 through Exercise 5-10
Exercise 5-6
Required
What is the cost of goods sold using full costing?
Exercise 5-7
Required
What is variable cost of goods sold?
Exercise 5-8
Required
What is net income using full costing?
Sales 2,160,000$
Exercise 5-9
Required
What is net income using variable costing?
Sales 2,160,000$
Exercise 5-10
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 Exercises E5-8 and E5-9.
Problem data follow:
Selling price per pair of speakers 1,800$
Costs involved in production:
Direct material 150$
Direct labor 200
Variable manufacturing overhead 100
Total variable manufacturing costs per unit 450$
Fixed manufacturing overhead per year 600,000$
In addition, the company has fixed selling and administrative costs:
Fixed selling costs per year 210,000$
Fixed administrative costs per year 110,000$
During the year, the following number of speakers were produced and sold:
Number of pairs of speakers produced 1,500
Number of pairs of speakers sold 1,200
Exercise 5-4
Required
What is the value of ending inventory using full costing?
Exercise 5-5
Required
What is the value of ending inventory using variable costing?
Solution: Exercise 5-4 through Exercise 5-10
Exercise 5-6
Required
What is the cost of goods sold using full costing?
Exercise 5-7
Required
What is variable cost of goods sold?
Exercise 5-8
Required
What is net income using full costing?
Sales 2,160,000$
Exercise 5-9
Required
What is net income using variable costing?
Exercise 5-10
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 Exercises E5-8 and E5-9.
Selling price per snow shovel 30.00$
Costs involved in production:
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 180,000$
Fixed selling and administrative costs per year 160,000$
During the year, Summit produced and sold the following:
Number of snow shovels produced 50,000
Number of snow shovels sold 45,000
Exercise 5-11
Required
What is the value of ending inventory using full costing?
Total unit cost
Number of units
Ending inventory under full costing
Exercise 5-12
Required
What is the value of ending inventory using variable costing?
Number of units
Ending inventory under full costing
Summit Manufacturing, Inc. produces snow shovels. There is no beginning inventory. The selling
price per snow shovel is:
Exercise 5-11 through Exercise 5-18
Exercise 5-13
Required
Shovels in ending inventory
Cost per unit
Difference in net income
Exercise 5-14
Required
What is the cost of goods sold using full costing?
Total unit cost
Number of units
Cost of goods sold under full costing
Exercise 5-15
Required
What is variable cost of goods sold?
Total unit cost
Number of units
Cost of goods sold under variable costing
Exercise 5-16
Required
What is net income using full costing?
Sales
Net income
Calculate the difference in full costing net income and variable costing net income without preparing
either income statement.
Exercise 5-17
Required
What is net income using variable costing?
Sales
Net income
Exercise 5-18
Required
How much fixed manufacturing overhead is in ending inventory under full costing?
Fixed overhead cost in ending inventory
Compare this amount to the difference in the net income calculated in Exercise E5-13.
Problem data follow:
Selling price per snow shovel 30.00$
Costs involved in production:
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 180,000$
Fixed selling and administrative costs per year 160,000$
During the year, Summit produced and sold the following:
Number of snow shovels produced 50,000
Number of snow shovels sold 45,000
Exercise 5-11
Required
What is the value of ending inventory using full costing?
5.00$
Solution: Exercise 5-11 through Exercise 5-18
Direct material per unit
Direct material per unit
Fixed manufacturing overhead cost per unit
Total unit cost
Direct labor per unit
Variable manufacturing overhead per unit
Direct labor per unit
Variable manufacturing overhead per unit
Cost of goods sold
Gross margin
Fixed selling and administrative costs
Exercise 5-13
Required
Exercise 5-14
Required
What is the cost of goods sold using full costing?
5.00$
Exercise 5-15
Required
What is variable cost of goods sold?
5.00$
Exercise 5-16
Required
What is net income using full costing?
Direct material per unit
Direct material per unit
Calculate the difference in full costing net income and variable costing net income without preparing
either income statement.