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Exercise 19-15 (Algo) Absorption costing and overproduction LO C1 A manufacturer reports direct materials of $6 per unit, direct labor of $3 per unit, and variable overhead of $4 per unit. Fixed overhead is $148,000 per year, and the company estimates sales of 14,800 units at a sales price of $26 per unit for the year. The company has no beginning finished goods inventory. 1. If the company uses absorption costing, compute gross profit assuming (a) 14,800 units are produced and 14,800 units are sold and (b) 18,500 units are produced and 14,800 units are sold. 2. If the company uses variable costing, how much would contribution margin differ if the company produced 18,500 units instead of producing 14,800? Assume the company sells 14,800 units. Complete this question by entering your answers in the tabs below. Required If the company uses variable costing, how much would contribution margin differ if the company produced 18,500 units Instead of producing 14,800? Assume the company sells 14,800 units. Hint: Calculations are not required. Contribution margin Required 11 < Required 1 Required 2 >

Exercise 19-15 (Algo) Absorption costing and overproduction LO C1 A manufacturer reports direct materials of $6 per unit, direct labor of $3 per unit, and variable overhead of $4 per unit. Fixed overhead is $148,000 per year, and the company estimates sales of 14,800 units at a sales price of $26 per unit for the year. The company has no beginning finished goods inventory. 1. If the company uses absorption costing, compute gross profit assuming (a) 14,800 units are produced and 14,800 units are sold and (b) 18,500 units are produced and 14,800 units are sold. 2. If the company uses variable costing, how much would contribution margin differ if the company produced 18,500 units instead of producing 14,800? Assume the company sells 14,800 units. Complete this question by entering your answers in the tabs below. Required If the company uses variable costing, how much would contribution margin differ if the company produced 18,500 units Instead of producing 14,800? Assume the company sells 14,800 units. Hint: Calculations are not required. Contribution margin Required 11 < Required 1 Required 2 >

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 19-15 (Algo) Absorption costing and overproduction LO C1 A manufacturer reports direct materials of $6 per unit, direct labor of $3 per unit, and variable overhead of $4 per unit. Fixed overhead is $148,000 per year, and the company estimates sales of 14,800 units at a sales price of $26 per unit for the year. The company has no beginning finished goods inventory. 1. If the company uses absorption costing, compute gross profit assuming (a) 14,800 units are produced and 14,800 units are sold and (b) 18,500 units are produced and 14,800 units are sold. 2. If the company uses variable costing, how much would contribution margin differ if the company produced 18,500 units instead of producing 14,800? Assume the company sells 14,800 units. Complete this question by entering your answers in the tabs below. Required 1 Required If the company uses variable costing, how much would contribution margin differ if the company produced 18,500 units Instead of producing 14,800? Assume the company sells 14,800 units. Hint: Calculations are not required. Contribution margina < Required 1 Required 2 >
Transcribed Image Text:Exercise 19-15 (Algo) Absorption costing and overproduction LO C1 A manufacturer reports direct materials of $6 per unit, direct labor of $3 per unit, and variable overhead of $4 per unit. Fixed overhead is $148,000 per year, and the company estimates sales of 14,800 units at a sales price of $26 per unit for the year. The company has no beginning finished goods inventory. 1. If the company uses absorption costing, compute gross profit assuming (a) 14,800 units are produced and 14,800 units are sold and (b) 18,500 units are produced and 14,800 units are sold. 2. If the company uses variable costing, how much would contribution margin differ if the company produced 18,500 units instead of producing 14,800? Assume the company sells 14,800 units. Complete this question by entering your answers in the tabs below. Required 1 Required If the company uses variable costing, how much would contribution margin differ if the company produced 18,500 units Instead of producing 14,800? Assume the company sells 14,800 units. Hint: Calculations are not required. Contribution margina < Required 1 Required 2 >
Exercise 19-15 (Algo) Absorption costing and overproduction LO C1 A manufacturer reports direct materials of $6 per unit, direct labor of $3 per unit, and variable overhead of $4 per unit. Fixed overhead is $148,000 per year, and the company estimates sales of 14,800 units at a sales price of $26 per unit for the year. The company has no beginning finished goods inventory. 1. If the company uses absorption costing, compute gross profit assuming (a) 14,800 units are produced and 14,800 units are sold and (b) 18,500 units are produced and 14,800 units are sold. 2. If the company uses variable costing, how much would contribution margin differ if the company produced 18,500 units instead of producing 14,800? Assume the company sells 14,800 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) 14,800 units are produced and 14,800 units are sold and (b) 18,500 units are produced and 14,800 units are sold. Sales Cost of goods sold Gross profit (0) 14,800 Units Produced and 14,500 Units Sald Saved (b) 18,500 Units Produced and 14,800 Units Sold Required 1 Required 2 >
Transcribed Image Text:Exercise 19-15 (Algo) Absorption costing and overproduction LO C1 A manufacturer reports direct materials of $6 per unit, direct labor of $3 per unit, and variable overhead of $4 per unit. Fixed overhead is $148,000 per year, and the company estimates sales of 14,800 units at a sales price of $26 per unit for the year. The company has no beginning finished goods inventory. 1. If the company uses absorption costing, compute gross profit assuming (a) 14,800 units are produced and 14,800 units are sold and (b) 18,500 units are produced and 14,800 units are sold. 2. If the company uses variable costing, how much would contribution margin differ if the company produced 18,500 units instead of producing 14,800? Assume the company sells 14,800 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) 14,800 units are produced and 14,800 units are sold and (b) 18,500 units are produced and 14,800 units are sold. Sales Cost of goods sold Gross profit (0) 14,800 Units Produced and 14,500 Units Sald Saved (b) 18,500 Units Produced and 14,800 Units Sold Required 1 Required 2 >
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