Reference no: EM132617563

Inc. has the following cost data for Product? X, and unit product cost using absorption costing when production is ?units, ?units, and units.

Data Table

Direct materials                     $34p er unit

Direct labor                         60 per unit

Variable manufacturing overhead  10 per unit

Fixed manufacturing overhead    15,000 per year

Reference

500 units IS THE FIRST

1,000 units IS THE SECOND

1,500 units IS THE THIRD

Direct materials

1) $34

2) $34

3) $34

Direct labor

1)60

2)60

3)60

Variable manufacturing overhead

1)10

2)10

3)10

Fixed manufacturing overhead

1)30

2)15

3)10

Total unit product cost

1)$134

2)$119

3)$114

Product X sells for 199 per unit.

Requirements

Problem 1: Calculate the gross profit using absorption costing when Abrey?:

a. Produces and sells 500 units.

b. Produces 1,000 units and sells 500 units.

c. Produces 1,500 units and sells 500 units.

Begin by selecting the labels and computing the gross profit for scenario a. and then compute the gross profit for scenario b. and c.