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How much would the company gross margin increase

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Reference no: EM132574933

Swisher, Incorporated reports the following annual cost data for its single product.

Normal production level         30,000 units

Direct Materials                $6.40 per unit

Direct Labor                    $3.93 per unit

Variable Overhead            $5.80 per unit

Fixed Overhead                $150,000 in total

Question 1: This product is normally sold for $48 per unit. If Swisher increases its production to 50,000 units, while sales remain at the current 30,000 unit level, by how much would the company's gross margin increase or decrease under absorption costing?

Reference no: EM132574933

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