Question: Johnson Controls compares variable and absorption costing: Production 50,000 units, Direct materials $10/unit, Direct labor $8/unit, Variable overhead $4/unit, Fixed overhead $200,000. Requirements: Calculate the

  1. Johnson Controls compares variable and absorption costing: Production 50,000 units, Direct materials $10/unit, Direct labor $8/unit, Variable overhead $4/unit, Fixed overhead $200,000.
    • Requirements:
      • Calculate the cost per unit under variable costing and absorption costing.
      • Prepare income statements using both costing methods.
      • Analyze the impact of production levels on reported profits.
      • Discuss the implications of each costing method for decision-making.

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