Problem - 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.
During the year, Summit produces 40,000 snow shovels and sells 37,000 show shovels.
Required. How much fixed manufacturing overhead is in ending inventory under full costing?