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Heather, Incorporated Reports the Following Annual Cost Data for Its

Question 144

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Heather, Incorporated reports the following annual cost data for its single product:
Heather, Incorporated reports the following annual cost data for its single product: This product is normally sold for $56 per unit. If Heather increases its production to 80,000 units while sales remain at the current 60,000 unit level, by how much would the company's gross margin increase or decrease under absorption costing? Assume the company has idle capacity to double current production. This product is normally sold for $56 per unit. If Heather increases its production to 80,000 units while sales remain at the current 60,000 unit level, by how much would the company's gross margin increase or decrease under absorption costing? Assume the company has idle capacity to double current production.

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$720,000/60,000 units = $12 FOH per unit...

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