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Variable Vs Absorpotion Costing

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2. Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations: Variable costs per unit: Manufacturing: Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6 Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9 Variable manufacturing overhead . . . . . . . . .. . . $ 3 Variable selling and administrative . . . . . . . . .. . $ 4 Fixed costs per year: Fixed manufacturing overhead . . . . . . . . . . . . . . . . . $ 300,000 Fixed selling and administrative . . . . . . . . . . . . . . . . $ 190,000 During the year, the company produced 25,000 units and sold 20,000 units. The selling price of the company’s product is $ 50 per unit. Required: 1.       Assume that the company uses absorption costing and compute the unit product cost. 2.       Assume that the company uses variable cost and compute the unit product cost.