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Variable Cost per Unit: Manufacturing: Direct Materials Direct Labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $30 $18 $2 $5 $700,000 $500,000 Sales Price = $90 per unit In year one, the company produced 40,000 units and sold 35,000 units 1. What is the unit cost under variable costing? 2. What is the unit cost under absorption costing? 3. What is the company's total contribution margin under variable costing? 4. What is the company's net operating income under variable costing? 5. What is the company's gross margin under absorption costing? 6. What is the company's net operating income under absorption costing? 7. What is the amount of the difference between the variable costing and absorption costing net operating income? What is the reason for the difference? 8. What is the company's breakeven point in unit sales? Is it above or below actual unit sales? 9. deleted 10. What would have been the company's variable costing net operating income if it had produced and sold 35,000 units? 11. What would have been the company's absorption costing net operating income if it had produced and sold 35,000 units? 12. If the company produces 5,000 fewer units than it sold in Year 2, will its absorption costing net operating income be higher or lower than variable costing net operating income

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