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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.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...
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Under absorption costing, a company had the following per unit costs when 5,000 units were produced. Direct materials Direct labor $ 6.60 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute total product cost per unit under absorption costing if instead 7,000 units are pro at $70,000. (Round your answers to 2 decimal places.) Absorption costing Per unit Direct labor Direct materials Fixed overhead Variable overhead Product cost per unit >> $ $ 5.60 6.60 7.60 19.80
Transcribed Image Text:Under absorption costing, a company had the following per unit costs when 5,000 units were produced. Direct materials Direct labor $ 6.60 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute total product cost per unit under absorption costing if instead 7,000 units are pro at $70,000. (Round your answers to 2 decimal places.) Absorption costing Per unit Direct labor Direct materials Fixed overhead Variable overhead Product cost per unit >> $ $ 5.60 6.60 7.60 19.80
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