Problem - Variable and Full Costing: Sales Constant but Production Fluctuates
Hamilton Stage Supplies is a manufacturer of a specialized type of light used in theaters. Information on the first three years of business is as follows:
|
|
2011
|
2012
|
2013
|
Total
|
|
Units sold
|
3,000
|
3,000
|
3,000
|
9,000
|
|
Units produced
|
3,000
|
4,500
|
1,500
|
9,000
|
|
Fixed production costs
|
$45,000
|
$45,000
|
$45,000
|
|
|
Variable production costs per unit
|
$75
|
$75
|
$75
|
|
|
Selling price per unit
|
$225
|
$225
|
$225
|
|
|
Fixed selling and administrative Expenses
|
$4,500
|
$4,500
|
$4,500
|
|
Required - Calculate profit and the value of ending inventory for each year using full costing.