Compute cost per unit: absorption and variable costing
Not what you're looking for?
Units produced $100,000.00
Units sold $95,000.00
Fixed manufacturing overhead $300,000.00
Direct materials per unit $55.00
Direct labor per unit $25.00
Variable manufacturing overhead per unit $15.00
A. Compute the cost per unit using absorption costing.
B. Compute the cost per unit using variable costing.
C. Compute the difference in net income between the two methods.
Which costing method results in the higher net income?
D. Assume that production was 80,000 units and sales were 100,000 units?
What would be the difference in net income between the two methods?
Which costing method shows the greater net income?
E. Assume the production was 100,000 units and sales were 100,000 units.
What would be the difference in net income between the two methods?
F. Which method is required by GAAP?
Purchase this Solution
Solution Summary
The expert computes the cost per unit for absorption and variable costing.
Purchase this Solution
Free BrainMass Quizzes
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Basics of corporate finance
These questions will test you on your knowledge of finance.