A company produces a product that sells for $600. Full absorption product costs are as...
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Accounting
A company produces a product that sells for $600. Full absorption product costs are as follows:
Direct materials
$120
Direct labor
40
Overhead*
240
$400
*Overhead is all fixed; the rate is based on $2,880,000 at a planned activity of 12,000 units.
Variable marketing costs (all commissions) are $20 per unit sold, and fixed marketing costs total $1,110,000.
In the most recent year, the company produced 12,000 units and sold 9,000 units.
1. What is the companys breakeven point in units? Show your calculations, rounding your answer up to the nearest whole unit if necessary. (Remember to include marketing costs in your computations.)
2. Determine the companys:
a. Absorption costing income. Show your work. (A formal statement is not necessary.)
b. Variable costing income. Show your work. (A formal statement is not necessary.)
c. Throughput costing income. Show your work. (A formal statement is not necessary.)
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