The Chip Division of the Chip and Dale Company sells its products for $30. per unit. Variable costs per unit are: manufacturing $12., selling and admin $2.. Fixed costs are $200,000 manufacturing overhead and $50,000 selling and administration. There was no beginning inventory. Expected sales for next year are 40,000 units. Dale Chip, the manager of Chip division, is under pressure to improve the performance of the Division. As he plans for next year, he has to decide whether to produce 40,000 units or 50,000 units. What would the manufacturing cost per unit be under absorption for each alternative?

Answer the following questions about Chip and Dale Company :

a) What is fixed overhead per unit if 50,000 units are produced? $ Answer b) What would the manufacturing cost per unit be under absorption costing if the company produces 40,000 units? Answer

c) What would the manufacturing cost per unit be under variable costing if the company produces 50,000 units? Answer

d) If 50,000 are produced and 45,000 are sold, how much fixed overhead is expensed in the income statement under variable costing?Answer e) If the company sell 45,000 units, what are the period costs under variable costing? Answer