(Answered) Problem - summit manufacturing inc produces snow shovels

Accounting

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 - What is variable cost of goods sold?

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