Exercise 19-15 (Algo) Absorption costing and overproduction LO C1 A manulacturer reports direct materials of $5 per unit, direct labor of $3 per unit, and variable overhead of $4 per unit. Fixed overhead is $144,000 per year, and the company estimates sales of 14,400 units at a sales price of $26 per unit for the yeat The compary has no beginning finlshed goods inventory 1. If the company uses absorption costing, compute gross profit assuming (b)14,400 units are produced and 14,400 units are sold and (b) 18,000 units are produced and 14,400 units are sold. 2. If the compony uses variable costing, how much would contribution margin diffor if the company produced 18,000 units instead of producing 14,400? Assurne the company sells 14,400 units. Hint: Calculations are not required. Complete this question by entering your answers in the tabs below. If the company uses absorption costing, compute gross profit assuming (a) 14,400 units are produced and 14,400 units are sold and (b) 18,000 units are produced and 14,400 units are sold. Exercise 19-15 (Algo) Absorption costing and overproduction LO C1 A manufacturer reports direct materials of $5 per unit, direct labor of $3 per unit, and variable overhead of $4 per unit .ixed overhead is $144,000 per year, and the company estimates sales of 14,400 units at a sales price of $26 per unit for the year. The company has no beginning finished goods inventory. 1. If the company uses absorption costing, compute gross profit assuming (a) 14,400 units are produced and 14,400 units are sold and (b) 18,000 units are produced and 14,400 units are sold. 2. If the company uses variable costing, how much would contribution margin differ if the company produced 18,000 units instead of producing 14,400? Assume the company sells 14,400 units. Hint: Calculations are not required Complete this question by entering your answers in the tabs below. If the company uses variable costing, how much would contribution margin differ if the company produced 18,000 units Instead of producing 14,400 ? Assume the company sells 14,400 units. Hint: Calculations are not required