Question

Vega Enterprises has computed the following unit costs for the year just ended: Direct material used $12 Direct labor 18 Variable manufacturing overhead 25 Fixed manufacturing overhead 29 Variable selling and administrative cost 10 Fixed selling and administrative cost 17 Under absorption costing, each unit of the company's inventory would be carried at: $84. None of the answers is correct. $35. $65. $55.

Answer 1

Unitary cost= $84

Step-by-step explanation:

Giving the following information:

Direct material used $12

Direct labor 18

Variable manufacturing overhead 25

Fixed manufacturing overhead 29

The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

Unitary cost= 12 + 18 + 25 + 29

Unitary cost= $84