Doozer Industries makes extruded aluminum that it sells to contractors. Last yea
ID: 2592454 • Letter: D
Question
Doozer Industries makes extruded aluminum that it sells to contractors. Last year, the company had no beginning inventory; they produced 100,000 units, and sold 70,000 of those units. The selling price per each unit is $70.
The variable costs per unit were:
Direct Materials ……................................…………$10 per unit
Direct Labor............................................................$4 per unit
Variable Man. Overhead...........................................$4 per unit
Variable selling and administrative expenses..........…$6 per unit
Fixed costs per year:
Fixed manufacturing Overhead ...................$300,000
Fixed Selling and Administrative expenses.. $900,000
(a) What is the cost of one unit of product under variable costing
(b) What is the cost of one unit of product under absorption costing
(c) Prepare the Income Statement using ABSORPTION Costing.
Explanation / Answer
a.
b.
c. Income statement absorption costing:
Unit product cost under variable costing: Variable costs per unit: Direct materials 10 Direct labor 4 Variable manufacturing overhead 4 Unit product cost under variable costing 18Related Questions
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