S21-7 (similar to) Question Help Adams, Inc. has the following cost data for Pro

Question

S21-7 (similar to) Question Help Adams, Inc. has the following cost data for Product x, and unit product cost using absorption costing when production is 2,000 units, 2,500 units, and 5,000 units. Product X sells for $166 per unit Read the requirements. (Click on the icon to view the cost data.) Begin by selecting the labels and computing the gross profit for scenario a. and then compute the gross profit for scenario b. and c. Absorption costing Requirements Cost of Goods Sold Reference Calculate the gross profit using absorption costing when Adams: a. Produces and sells 2,000 units. b. Produces 2,500 units and sells 2,000 units. c. Produces 5,000 units and sells 2,000 units. Gross Profit 2,000 units 2,500 units Direct materials Direct labor Varlable manufacturing overhead Flxed manufacturing overhead Total unit product cost 45 S 51 10 10 45 S 51 10 5,000 units 45 51 10 PrintDone Data Table 116 S 114 S 110 Direct materials Direct labor Variable manufacturing overhead 45 51 10 20,000 per unit per unit per unit per year PrintDone PrintDone

Explanation / Answer

Compute gross profit under absorption costing :

a b c Sales (2000*166) 332000 332000 332000 Cost of goods sold (232000) (228000) (220000) Gross profit 100000 104000 112000

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