A manufacturer reports direct materials of $$5$ per unit, direct labor of $$2$ per unit, and variable overhead of $$3$ per unit. Fixed overhead

is $$152,000$ per year, and the company estimates sales of $15,200$ units at a sales price of $$23$ per unit for the year. The company has

no beginning finished goods inventory.

If the company uses absorption costing, compute gross profit assuming $($a$)15,200$ units are produced and $15,200$ units are sold and

$($b$)19,000$ units are produced and $15,200$ units are sold.

If the company uses variable costing, how much would contribution margin differ if the company produced $19,000$ units instead of

producing $15,200?$ Assume the company sells $15,200$ units. Hint: Calculations are not required.

Complete this question by entering your answers in the tabs below.

Required $1$

If the company uses absorption costing, compute gross profit assuming $($a$)15,200$ units are produced and $15,200$ units are

sold and $($b$)19,000$ units are produced and $15,200$ units are sold.