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1)Suppose that a company manufactures one single product

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1)Suppose that a company manufactures one single product. Annual production capacity is 100 tons. The company manufactured 50 tons and sold 40 tons this year. Relevant data are as follows: (a) Sales: 40.000.000 $, (b) Direct material costs 14.000.000 $, (c) Direct labor 5.000.000 $, (d) Overhead (variable) 4.500.000 $, (e) Overhead (fixed) 8.000.000 $. Find the gross profit margin if the company employs full absorption costing.

1. 21,25%
2. 68,50%
3. 49,60%
4. 37,00%

2- Refer to Question 1 above. What would be the unit cost of production had the company employed normal absorption costing?

1. 470.000 $
2. 550.000 $
3. 630.000 $
4. 900.000 $