Washington Company Provided the Following Information Regarding Its Only Product--Ice

question 101

Multiple Choice

Washington Company provided the following information regarding its only product--ice skates. $\begin{array}{lr}\text { Direct materials used } & \$ 200,000 \\\text { Direct labor } & 80,000 \\\text { Fixed overhead } & 100,000 \\\text { Fixed selling and administrative costs } & 300,000 \\\text { Variable overhead } & 20,000 \\\text { Variable selling and administrative } & 60,000 \\\text { Selling unit price } & 100 \\& \\\text { Units produced and sold } & 10,000\end{array}$ The difference in manufacturing cost per unit between the absorption approach and contribution approach is _____.

• A)$10 higher if absorption cost is used
• B)$10 higher if contribution cost is used
• C)$40 higher if absorption is used
• D)$40 higher if contribution is used

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