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1)  Peggy's Pillows produces and sells a decorative pillow for $75

Accounting

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1) 

Peggy's Pillows produces and sells a decorative pillow for $75.00 per unit. In the first month of operation, 2,000 units were produced and 1,750 units were sold. There are no spending or efficiency variances. Other information for the month includes:

 

Direct labor costs$10.00 per unitDirect material costs$20.00 per unitVariable manufacturing OH$5.00 per unitVariable marketing costs$ 3.00 per unitFixed manufacturing OH$ 7.00 per unitAdministrative expenses, all fixed$15.00 per unit

 

What is the difference between operating incomes under absorption costing and variable costing?

Group of answer choices

 

 

$2,500 higher

 

$1,750 lower

 

$1,750 higher

 

$2,500 lower

 

2)

  A business reports cost of goods sold of $295,000 in 2019. Included in the cost of goods sold is fixed overhead of $90,000.

Calculate the variable production costs