Variable and Absorption Costing Scott Manufacturing makes only one product with total unit manufacturing costs of $54, of which $36 is variable. No units were on hand at the beginning of 2015. During 2015 and 2016, the only product manufactured was sold for $84 per unit, and the cost structure did not change. Scott uses the first-in, first-out inventory method and has the following production and sales for 2015 and 2016:

Units ManuTacturea units Soid 2015 120,000 90,000 2016 120,000 130,000 a. Prepare gross profit computations for 2015 and 2016 using absorption costing. Do not use negative signs with your answers. Absorption Costing 2015 2016 Sales Cost of goods sold Beginning inventory $7,560,000 $1,092,000 1,620,000 Production 6,480,000 648,000 Goods available 0 0 Less: Ending inventory Cost of goods sold 0 0 Gross profit