Exercise $19-15($Algo$)$ Absorption costing and overproduction LO C$1$

A manufacturer reports direct materials of $$6$ per unit, direct labor of $$3$ per unit, and variable overhead of $$5$ per unit. Fixed overhead is $$156,000$ per year, and the company estimates sales of $15,600$ units at a sales price of $$26$ per unit for the year. The company has no beginning finished goods inventory.

If the company uses absorption costing, compute gross profit assuming $($a$)15,600$ units are produced and $15,600$ units are sold and $($b$)19,500$ units are produced and $15,600$ units are sold.

If the company uses variable costing, how much would contribution margin differ if the company produced $19,500$ units instead of producing $15,600?$ Assume the company sells $15,600$ units. Hint: Calculations are not required.

Complete this question by entering your answers in the tabs below.

If the company uses absorption costing, compute gross profit assuming $($a$)15,600$ units are produced and $15,600$ units are sold and $($b$)19,500$ units are produced and $15,600$ units are sold.

$\backslash$table$[[,\backslash$table$[[($a$)15,600$ Units$],[$Produced and$],[15,600$ Units Sold$]],\backslash$table$[[($b$)19,500$ Units$],[$Produced and$],[15,600$ Units Sold$]]],[$Sales$,,],[$Cost of goods sold,,$],[$Gross profit,,$]]$