A company reports the following information regarding its production cost:
$$\begin{array} { | l | l | }
\hline \text { Units produced } & 22,000 \text { units } \
\hline \text { Direct labor } & \$ 31 \text { per unit } \
\hline \text { Direct materials } & \$ 27 \text { per unit } \
\hline \text { Variable overhead } & ? \text { in total } \
\hline \text { Fixed overhead } & \$ 2,750,000 \text { in total } \
\hline
\end{array}$$ Required: Perform the following independent calculations.
a. Compute total variable overhead cost if the production cost per unit under variable costing is $240.
b. Compute total variable overhead cost if the production cost per unit under absorption costing is $240.

Question

A company reports the following information regarding its production cost:
 $$\begin{array} { | l | l | } 
\hline \text { Units produced } & 22,000 \text { units } \
\hline \text { Direct labor } & \$ 31 \text { per unit } \
\hline \text { Direct materials } & \$ 27 \text { per unit } \
\hline \text { Variable overhead } & ? \text { in total } \
\hline \text { Fixed overhead } & \$ 2,750,000 \text { in total } \
\hline
\end{array}$$ Required: Perform the following independent calculations.
a. Compute total variable overhead cost if the production cost per unit under variable costing is $240.
b. Compute total variable overhead cost if the production cost per unit under absorption costing is $240.

Quizplus · Accepted Answer

The Answer of A company reports the following information regarding its production cost:
 $$\begin{array} { | l | l | } 
\hline \text { Units produced } & 22,000 \text { units } \
\hline \text { Direct labor } & \$ 31 \text { per unit } \
\hline \text { Direct materials } & \$ 27 \text { per unit } \
\hline \text { Variable overhead } & ? \text { in total } \
\hline \text { Fixed overhead } & \$ 2,750,000 \text { in total } \
\hline
\end{array}$$ Required: Perform the following independent calculations.
a. Compute total variable overhead cost if the production cost per unit under variable costing is $240.
b. Compute total variable overhead cost if the production cost per unit under absorption costing is $240.

A Company Reports the Following Information Regarding Its Production Cost