Dugan Companys fixed overhead costs are $3 per unit, and its variable overhead costs are $8 per

Question:

Dugan Company’s fixed overhead costs are $3 per unit, and its variable overhead costs are $8 per unit. In the first month of operations, 50,000 units are produced, and 47,000 units are sold. Write a short memo to the chief financial officer explaining which costing approach will produce the higher income and what the difference will be.