Problem 5-2 Variable and Full Costing: Sales and Production Fluctuate Hamilton Stage Supplies is a manufacturer of a specialized type of light used in theaters. Information on the first three years

Problem 5-2 Variable and Full Costing: Sales and Production Fluctuate

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:

2014 2015 2016 Total

Units sold 5,000 5,000 5,000 15,000

Units produced 5,000 6,000 4,000 15,000

Fixed production costs $50,000 $50,000 $50,000

Variable production costs per unit $75 $75 $75

Selling price per unit $225 $225 $225

Fixed selling price and $5,000 $5,000 $5,000

administrative expenses

A. Calculate profit and the value of ending inventory for each year using full costing. Round cost percent to two decimal places.

C. Calculate profit and the value of ending inventory for each year using variable costing.

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