Question

M&H’s unit production cost under variable costing is $24, and $31 under absorption costing. Net income...

M&H’s unit production cost under variable costing is $24, and $31 under absorption costing. Net income under variable costing was $237000 and $178900 under absorption costing last year. Production equalled 70000 units. How many units did M&H sell?

78300

61700

77000

63000

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Answer #1

Correct answer----------61700

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Income under absorption costing $   178,900.00
Income under variable costing $   237,000.00
Difference in income $     58,100.00
Divided by :: Fixed overhead per unit $                7.00
Units in ending Inventory 8300

.

Cost per unit in absorption costing $        31.00
Cost per unit in Variable costing $        24.00
Difference between absorption and variable costing $          7.00

.

Units produced 70000
Less: Units in ending Inventory 8300
Units sold 61700
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