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 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please help me with calculation thanku
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 >
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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