In the coming year, Gascon Company expects to sell 74,600 units at $30 each. Gascons controller provided the following information

Question:

In the coming year, Gascon Company expects to sell 74,600 units at $30 each. Gascon’s controller provided the following information for the coming year.
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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Question Details
Chapter # 8
Section: Multiple Choice Questions
Problem: 25
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Question Posted: February 04, 2012 00:45:51