Answer:
Value of ending inventory = $97,650
Step-by-step explanation:
Full costing is a costing method that consider all the costs including all variable and fixed costs in determining the cost of producing products or services.
From the question, we have the following:
Total variable manufacturing costs per unit = $11.00
Fixed manufacturing overhead per year = $233,550
Number of snow shovels produced during the year = 51,900
Number of snow shovels sold during the year = 46,500
Therefore, we have:
Total variable manufacturing costs incurred during the year = Total variable manufacturing costs per unit * Number of shovels produced during the year = $11.00 * 51,900 = $570,900
Based on full costing, we have:
Total cost of producing snow shovel during the year = Fixed manufacturing overhead per year + Total variable manufacturing costs incurred during the year = $233,550 + $570,900 = $804,450
Production cost per unit = Total cost of producing snow shovel during the year / Number of snow shovels produced during the year = $804,450 / 51,900 = $15.50
Number of ending inventory = Number of snow shovels produced during the year - Number of snow shovels sold during the year = 51,900 - 46,500 = 6,300
Value of ending inventory = Number of ending inventory * Production cost per unit = 6,300 * $15.50 = $97,650
