A manufacturer reports direct materials of $5 per unit, direct labor of $2 per unit, and...

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A manufacturer reports direct materials of $5 per unit, direct labor of $2 per unit, and variable overhead of $3 per unit. Fixed overhead is $168,000 per year, and the company estimates sales of 16,800 units at a sales price of $22 per unit for the year. The company has no beginning finished goods inventory. 1. If the company uses absorption costing, compute gross profit assuming (a) 16,800 units are produced and 16,800 units are sold and (b) 21,000 units are produced and 16,800 units are sold. 2. If the company uses variable costing, how much would contribution margin differ if the company produced 21,000 units instead of producing 16,800? Assume the company sells 16,800 units. Hint: Calculations are not required. Complete this question by entering your answers in the tabs below. Required 1 Required 2 If the company uses absorption costing, compute gross profit assuming (a) 16,800 units are produced and 16,800 units are sold and (b) 21,000 units are produced and 16,800 units are sold. (a) 16,800 Units: Produced and 16,800 Units Sold (b) 21,000 Units Produced and 16,800 Units Sold Gross profit A manufacturer reports direct materials of $5 per unit, direct labor of $2 per unit, and variable overhead of $3 per unit. Fixed overhead is $168,000 per year, and the company estimates sales of 16,800 units at a sales price of $22 per unit for the year. The company has no beginning finished goods inventory. 1. If the company uses absorption costing, compute gross profit assuming (a) 16,800 units are produced and 16,800 units are sold and (b) 21,000 units are produced and 16,800 units are sold. 2. If the company uses variable costing, how much would contribution margin differ if the company produced 21,000 units instead of producing 16,800? Assume the company sells 16,800 units. Hint: Calculations are not required. Complete this question by entering your answers in the tabs below. Required 1 Required 2 If the company uses absorption costing, compute gross profit assuming (a) 16,800 units are produced and 16,800 units are sold and (b) 21,000 units are produced and 16,800 units are sold. (a) 16,800 Units: Produced and 16,800 Units Sold (b) 21,000 Units Produced and 16,800 Units Sold Gross profit

Answer rating: 100% (QA)

Required 1 Gross Profit under Absorption Costing a 16800 Units Produced and 16800 Units Sold Cost of ... View the full answer