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Exercise 6-15 (Algo) Absorption costing and overproduction LO C1 A manufacturer reports direct materiais of $6 per unit, direct labor of $3 per unit, and varlable overhead of $5 per unit. Fixed overhead is $124,000 per year, and the company estimates sales of 12,400 units at a sales price of $26 per unit for the year. The company has no beginning finished goods inventory. 1. If the company uses absorption costing, compute gross profit assuming (a) 12,400 units are produced and 12,400 units are sold and (b)15,500 units are produced and 12,400 units are sold. 2. If the company uses variable costing, how much would contribution margin differ if the company produced 15,500 units instead of producing 12,400? Assume the company sells 12,400 units. Hint: Calculations are not required. Complete this question by entering your answers in the tabs below. If the company uses absorption costing, compute gross profit assuming (a) 12,400 units are produced and 12,400 units are sold and (b) 15,500 units are produced and 12,400 units are sold. Exercise 6-15 (Algo) Absorption costing and overproduction LO C1 A manufacturer reports direct materials of $6 per unit, direct labor of $3 per unit, and varlable overhead of $5 per unit. Fixed overhead is $124,000 per year, and the company estimates sales of 12,400 units at a sales price of $26 per unit for the year. The company has no beginning finished goods inventory. 1. If the company uses absorption costing, compute gross profit assuming (a)12,400 units are produced and 12,400 units are sold and (b)15,500 units are produced and 12,400 units are sold. 2. If the company uses variable costing, how much would contribution margin differ if the company produced 15,500 units instead of producing 12,400? Assume the company sells 12,400 units. Hint: Calculations are not required. Complete this question by entering your answers in the tabs below. If the company uses variable costing, how much would contribution margin differ if the company produced 15,500 units instead of producing 12,400? Assume the company sells 12,400 units. Hint: Calculations are not required. Exercise 6-16 (Algo) Target pricing LO P3 Huds incorporated reports the information below on its product. The company uses absorption costing and has a target markup of 40% of absorption cost per unit. Compute the target selling price per unit under absorption costing. Note: Do not round intermediate calculations. Round your final answers to 2 decimal places

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