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Adelphia Corporation, which uses absorption costing, just completed its first year of operations. Planned and actual production equaled 12,000 units, and sales totaled 11,400 units
Adelphia Corporation, which uses absorption costing, just completed its first year of operations. Planned and actual production equaled 12,000 units, and sales totaled 11,400 units at $139 per unit. Cost data for the year are as follows:
a. How much of the company's total cost for the year would be included as an expense on the period's income statement under (a) absorption costing and (b) variable costing?
Direct material (per unit) | $ | 28 | |
Conversion cost: | |||
Direct labor | 504,000 | ||
Variable manufacturing overhead | 420,000 | ||
Fixed manufacturing overhead | 504,000 | ||
Selling and administrative costs: | |||
Variable (per unit) | 30 | ||
Fixed | 358,100 |
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