Under absorption costing, a company had the following per unit costs when 5,000 units were produced. Direct materials $ 6.60 Direct labor 5.60 Variable overhead 7.60 Fixed overhead ($70,000/5,000 units) 14.00 Total product cost per unit $ 33.80 1. Compute total product cost per unit under absorption costing if instead 7,000 units are produced. Total fixed overhead remains at $70,000. 2. If units produced is greater than units sold, will cost of goods sold under absorption costing increase or decrease? Answer is not complete.

Under absorption costing, a company had the following per unit costs when 5,000 units were produced. Direct materials $ 6.60 Direct labor 5.60 Variable overhead 7.60 Fixed overhead ($70,000/5,000 units) 14.00 Total product cost per unit $ 33.80 1. Compute total product cost per unit under absorption costing if instead 7,000 units are produced. Total fixed overhead remains at $70,000. 2. If units produced is greater than units sold, will cost of goods sold under absorption costing increase or decrease? Answer is not complete.

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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