During its first year, Walnut, Inc., showed an $36 per-unit profit under absorption costing but would have reported a total profit $32,000 less under variable costing. If production exceeded sales by 500 units and an average contribution margin of 62.5% was maintained, what is the apparent:
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
I've been trying to determine the answer to this practice question. Answer A. is 64, but I'm having trouble with B,C and D.
Variable and Absorption Costing
During its first year, Walnut, Inc., showed an $36 per-unit profit under absorption costing but would have reported a total profit $32,000 less under variable costing. If production exceeded sales by 500 units and an average contribution margin of 62.5% was maintained, what is the apparent:
a. Fixed cost per unit?
b. Sales price per unit?
c. Variable cost per unit?
d. Unit sales volume if total profit under absorption costing was $198,000?
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