A Company Reports the Following Information Regarding Its Production Cost

Essay

A company reports the following information regarding its production cost:
$$\begin{array} { | l | l | } \hline \text { Units produced } & 14,000 \text { units } \\\hline \text { Direct labor } & \$ 13 \text { per unit } \\\hline \text { Direct materials } & \$ 3 \text { per unit } \\\hline \text { Variable overhead } & ? \text { in total } \\\hline \text { Fixed overhead } & \$ 56,000 \text { in total } \\\hline\end{array}$$ Required: Perform the following independent calculations.
a. Compute total variable overhead cost if the production cost per unit under variable costing is $73.
b. Compute total variable overhead cost if the production cost per unit under absorption costing is $73.