Garrison Industries produces synthetic rubber used for industrial applications such as conveyor belts. In 2020, the first year of operations, Garrison produced 5,500 tons of rubber and sold 3,200 tons. In 2021, the company produced the same amount of rubber, and sales were 6,500 tons (i.e., the company sold all of its inventory). In each year, the selling price per ton was $2,500, variable manufacturing costs per ton of rubber were $500, and variable selling expenses were $700 for each ton of rubber sold. Fixed manufacturing costs were $5,500,000, and fixed administrative expenses were $650,000. What is the unit manufacturing cost under absorption costing in the year 2021?

Garrison Industries produces synthetic rubber used for industrial applications such as conveyor belts. In 2020, the first year of operations, Garrison produced 5,500 tons of rubber and sold 3,200 tons. In 2021, the company produced the same amount of rubber, and sales were 6,500 tons (i.e., the company sold all of its inventory). In each year, the selling price per ton was $2,500, variable manufacturing costs per ton of rubber were $500, and variable selling expenses were $700 for each ton of rubber sold. Fixed manufacturing costs were $5,500,000, and fixed administrative expenses were $650,000. What is the unit manufacturing cost under absorption costing in the year 2021?

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter18: Cost-volume-profit Analysis (cvp)

Section: Chapter Questions

Problem 1R: Poleski Manufacturing, which maintains the same level of inventory at the end of each year, provided...

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