product costs under absorption vs variable costing
Not what you're looking for?
Your CFO attended an industry trade show and looked forward to sitting through one of the seminars offered that was titled "Why is it so important to know your product's costs?" Unfortunately, she missed this seminar. This is a very important topic that you plan to discuss with her yourself.
Prepare notes for your meeting with the CFO that includes the following:
How will the components of unit product costs be different if she uses absorption costing versus variable costing? Include your calculations.
Using the following company data, determine unit product costs under absorption and variable costing, and show your calculations:
Planned units produced in the year
10,000
Direct labor/unit
$200
Direct material/unit
$2,000
Variable manufacturing overhead/unit
$400
Variable SG&A/unit
$200
Fixed manufacturing overhead/year
$2,000,000
Fixed SG&A
$500,000
Purchase this Solution
Solution Summary
See my computations in the attached excel sheet. Response shows which costs are excluded from the computations but do not have an in-depth discussion about product vs. nonproduct costs.
Education
- BSc, University of Virginia
- MSc, University of Virginia
- PhD, Georgia State University
Recent Feedback
- "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
- "Thank, this is more clear to me now."
- "Awesome job! "
- "ty"
- "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
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.
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.