Reference no: EM132866121

During 2021 Snow produced 30,000 units and sold 27,000 units at a price of $90 per unit. Fixed factory overhead is applied based on production. Costs for last year were as follows:

Variable costs per unit

Direct materials $20
Direct labour $10
Variable overhead $2
Variable selling $3

Fixed costs

Manufacturing cost $330,000

Selling and administration $120,000

-What is the cost of ending inventory on the balance sheet if Snow is using absorption costing?

-What is the cost of ending inventory on the balance sheet if Snow is using variable costing?

-Determine income for Snow. Assume Snow is using absorption costing. Show workings.

-Calculate net income for Snow. Assume Snow is using variable costing.