Question
Dynasty Company manufactures stackable plastic cubes that are used for storage in dorm rooms. In August 2010, Dynasty began producing multi-coloured cubes. During the month
Dynasty Company manufactures stackable plastic cubes that are used for storage in dorm rooms. In August 2010, Dynasty began producing multi-coloured cubes. During the month of August, 9,000 were produced, and 8,800 were sold at $7.50 each. The following costs were incurred:
Direct materials $10,800
Direct labour 6,750
Variable overhead 5,850
Fixed overhead 27,900
A selling commission of 10 percent of sales price was paid. Administrative expenses, all fixed, amounted to $23,000.
Required:
Calculate the unit cost and the cost of ending inventory under absorption costing.
Calculate the unit cost and the cost of ending inventory under variable costing.
What is the contribution margin per unit?
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