A manufacturer of ergonomically designed computer keyboards has actual and estimated fixed costs of 1 million. Variable
Question:
A manufacturer of ergonomically designed computer keyboards has actual and estimated fixed costs of €1 million. Variable costs per unit are €18. The allocation base is the number of units produced. The sales price of the keyboard is €50 per unit. There is no beginning inventory. During the year, the manufacturer makes and sells 60,000 keyboards. In December, the plant manager is considering the opportunity to make another 15,000 units, but these 15,000 units cannot be sold this year.
What is the manufacturer’s profit with and without the additional 15,000 units, under the absorption and variable costing systems?
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To calculate the manufacturers profit under absorption and variable costing systems we need to consider the treatment of fixed manufacturing overhead ...View the full answer
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