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Varilux manufactures a single product and sells it for $10 per unit. At the beginning of the year there were 1,000 units in inventory. Upon
Varilux manufactures a single product and sells it for $10 per unit. At the beginning of the year there were 1,000 units in inventory. Upon further investigation, you discover that units produced last year had $3.00 of fixed manufacturing cost and $2.00 of variable manufacturing cost. During the year Varilux produced 10,000 units of product. Each unit produced generated $3.00 of variable manufacturing cost. The total fixed manufacturing cost for the current year was $40,000. There were no inventories at the end of the year. Using variable costing, what is the profit? a. $110,000 b. $40,000 c. $38,000 d. $35,000 Using absorption costing, the cost per unit this period would be? a. $8 per unit b. $5 per unit c. $6 per unit d. $7 per unit Using absorption costing, the profit would be? a. $45,000 b. $55,000 c. $35,000 d. $25,000
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