During its first year, Walnut, Inc. showed an $18 per-unit profit under absorption costing but would have reported a total profit of $16,000 less under variable costing. Suppose production exceeded sales by 500 units and an average contribution margin of 62.5% was maintained. a. What is the fixed cost per unit? b. What is the sales price per unit? c. What is the variable cost per unit? d. What is the unit sales volume if total profit under absorption costing was $198,000?

During its first year, Walnut, Inc. showed an $18 per-unit profit under absorption costing but would have reported a total profit of $16,000 less under variable costing. Suppose production exceeded sales by 500 units and an average contribution margin of 62.5% was maintained. a. What is the fixed cost per unit? b. What is the sales price per unit? c. What is the variable cost per unit? d. What is the unit sales volume if total profit under absorption costing was $198,000?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 16DQ

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