Exercise $19-15($Algo$)$ Absorption costing and overp

A manufacturer reports direct materials of $$5$ per unit, direct labor of $$2$ per unit, and variable overhead of $$3$ per unit. Fixed overhead is $$176,000$ per year, and the company estimates sales of $17,600$ units at a sales price of $$22$ per unit for the year. The company has no beginning finished goods inventory.

If the company uses absorption costing, compute gross profit assuming $($a$)17,600$ units are produced and $17,600$ units are sold and $($b$)22,000$ units are produced and $17,600$ units are sold.

If the company uses variable costing, how much would contribution margin differ if the company produced $22,000$ units instead of producing $17,600?$ Assume the company sells $17,600$ 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$)17,600$ units are produced and $17,600$ units are sold and $($b$)22,000$ units are produced and $17,600$ units are sold.

$\backslash$table$[[,\backslash$table$[[($a$)17,600$ Units$],[$Produced and$],[17,600$ Units Sold$]],\backslash$table$[[($b$)22,000$ Units$],[$Produced and$],[17,600$ Units Sold$]]],[$Sales$],[$Cost of goods sold,,$],[$Gross profit,$2,]]$