Problem 5-1 Variable and Full Costing: Sales Constant but Production Fluctuates Spencer Electronics produces a wireless home lighting device that allows consumers to turn on home lights from their cars and light a safe path into and through their homes. Information on the first three years of business is as follows: 2017 2019 Total 60,000 60,000 Units sold Units produced Fixed production costs Variable production costs per unit Selling price per unit Fixed selling and administrative expense 20,000 20,000 $750,000 150 250 220,000 2018 20,000 25,000 $750,000 150 250 220,000 20,000 15,000 $750,000 150 250 220,000 Required a. Calculate profit and the value of ending inventory for each year using full costing. 2017 2018 2019 Fixed production costs Number of units Fixed production cost per unit Variable production costs per unit Full cost per unit Sales Cost of goods sold Gross margin Selling and administrative expense Net income 5,000 Number of units Cost per unit Value of ending inventory c. Calculate profit and the value of ending inventory for each year using variable costing. 2017 2018 2019 Sales Variable cost of goods sold Contribution margin Fixed production costs Fixed selling and admin. expense Net income 5,000 Number of units Cost per unit Value of ending inventory d. Explain why, using variable costing, profit does not fluctuate from year to year. SKIP