Question

# In 2018, Joshua Company's income under absorption costing was \$15,000 higher than its income under variable...

In 2018, Joshua Company's income under absorption costing was \$15,000 higher than its income under variable costing. During the year, the company produced 20,000 units. If total variable production costs were \$80,000 and fixed manufacturing overhead was \$40,000, how many units did the company sell in 2018?

This is all the information given. Please show work so I can learn. Thank you.

 Number of Units Sold 12,500.00
 Fixed Manufactring Cost 40,000.00 Production Units 20,000.00 Fixed Manufactring Cost per Unit 2.00 Excess Income under absorption costing 15,000.00 Total Fixed Cost 40,000.00 Fixed Cost Allocated in Current Year 25,000.00 Fixed Manufactring Cost per Unit 2.00 Number of Units Sold 12,500.00

Under Absorption, the Fixed Cost is allocated to unit sold and closing stock. So if the profit under absorption is more by 15,000 that means the cost of Fixed cost allocated to the closing stock is 15,000.

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