In the coming year, Gascon Company expects to sell 74,600 units at $30 each. Gascons controller provided the following information
Question:
Units production .............80,000
Unit direct materials ............$7.50
Unit direct labor ...............$2.75
Unit variable overhead ...........$3.90
Unit fixed overhead*........... $4.50
Unit selling expense (variable) ........$2.00
Total fixed selling expense ..........$56,500
Total fixed administrative expense .....$213,000
* The unit fixed overhead is based on 80,000 units produced.
Required:
1. Calculate the cost of one unit of product under absorption costing.
2. Calculate the cost of one unit of product under variable costing.
3. Calculate operating income under absorption costing for next year.
4. Calculate operating income under variable costing for next year.
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Step by Step Answer:
Related Book For
Cornerstones of Managerial Accounting
ISBN: 978-0324660135
3rd Edition
Authors: Mowen, Hansen, Heitger
Question Details
Chapter #
8
Section: Multiple Choice Questions
Problem: 25
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Question Posted: February 04, 2012 00:45:51