Variable manufacturing costs are $123 per unit, and fixed manufacturing costs are $55,000. Sales are estimated to be 4,000 units.If an amount is zero, enter "0". Round intermediate calculations to the nearest cent and your final answers to the nearest dollar.How much would absorption costing operating income differ between a plan to produce 4,000 units and a plan to produce 5,000 units?Xa.$b. How much would variable costing operating income differ between the two production plans?

Absorption costing method is a method of costing in which product cost is calculated by adding…

Answered: Variable manufacturing costs are $123…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 4BE

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The profit function for two products is: Profit3x12+42x13x22+48x2+700, where x1 represents units of production of product 1, and x2 represents units of production of product 2. Producing one unit of product 1 requires 4 labor-hours, and producing one unit of product 2 requires 6 labor-hours. Currently, 24 labor-hours are available. The cost of labor-hours is already factored into the profit function, but it is possible to schedule overtime at a premium of 5 per hour. a. Formulate an optimization problem that can be used to find the optimal production quantity of products 1 and 2 and the optimal number of overtime hours to schedule. b. Solve the optimization model you formulated in part (a). How much should be produced and how many overtime hours should be scheduled?
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