Item10

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Item 10

Jax Incorporated reports the following data for its only product. The company had no beginning finished goods inventory and it uses absorption costing.

Sales price	$ 56.60	per unit
Direct materials	$ 9.60	per unit
Direct labor	$ 7.10	per unit
Variable overhead	$ 11.60	per unit
Fixed overhead	$ 910,800	per year

1. Compute gross profit assuming (a) 66,000 units are produced and 66,000 units are sold and (b) 92,000 units are produced and 66,000 units are sold. 2. By how much would the companys gross profit increase or decrease from producing 26,000 more units than it sells?