During the last year, Hansen Company had operating income under absorption costi
ID: 2541456 • Letter: D
Question
During the last year, Hansen Company had operating income under absorption costing that was $5,500 lower than its operating income under variable costing. The company sold 9,000 units during the year, and its variable costs were $10 per unit, of which $6 was variable selling expense. If fixed production cost is $5 per unit under absorption costing every year, how many units did the company produce during the year?
10,100 units
7,625 units
7,900 units
8,450 units
a.10,100 units
b.7,625 units
c.7,900 units
d.8,450 units
Explanation / Answer
Units produced during the year=9000-(5500/5) = 7900 units Option C is correct
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