A Company Reports the Following Information Regarding Its Production Cost

question 132

Essay

A company reports the following information regarding its production cost:
$$\begin{array} { | l | l | } \hline \text { Units produced } & 14,000 \text { units } \\\hline \text { Direct labor } & \$ 13 \text { per unit } \\\hline \text { Direct materials } & \$ 3 \text { per unit } \\\hline \text { Variable overhead } & ? \text { in total } \\\hline \text { Fixed overhead } & \$ 56,000 \text { in total } \\\hline\end{array}$$ Required: Perform the following independent calculations.
a. Compute total variable overhead cost if the production cost per unit under variable costing is $73.
b. Compute total variable overhead cost if the production cost per unit under absorption costing is $73.

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Definitions:

Italian Renaissance

A period of great cultural change and achievement in Italy that began in the 14th century, characterized by advancements in art, architecture, literature, and science.

Idealism

A philosophical approach asserting that reality, or reality as we can know it, is fundamentally mental, mentally constructed, or otherwise immaterial.

Realism

An artistic, literary, and intellectual movement that rejects idealization, focusing on depicting subjects as they are perceived in everyday life.

Religious Order

An organization of individuals who live under religious vows and dedicate their lives to spiritual goals, following a specific set of rules.