A Company Reports the Following Information Regarding Its Production Cost

question 107

Essay

A company reports the following information regarding its production cost:
$\begin{array}{ll}\text { Units produced } & 22,000 \text { units } \\\text { Direct labor } & \$ 31 \text { per unit } \\\text { Direct materials } & \$ 27 \text { per unit } \\\text { Variable overhead } & ? \text { in total } \\\text { Fixed overhead } & \$ 2,750,000 \text { in total }\end{array}$ 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.

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Definitions:

Financial

Pertaining to the management of money, investments, and other monetary transactions.

Marketing

The activities, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Small Business Investment Companies (SBICs)

Privately owned and managed investment funds, licensed and regulated by the SBA, that provide capital to small businesses.