Question

Emerald​ Pools, Inc. has provided the following information for the year. Units produced ​14,000 units Sales price ​$400 per unit Direct materials ​$45 per unit Direct labor ​$20 per unit Variable manufacturing overhead ​$65 per unit Fixed manufacturing overhead ​$500,000 per year Variable selling and administration costs ​$85 per unit Fixed selling and administration costs ​$270,000 per year What is the unit product cost using absorption​ costing? (Round any intermediate calculations and your final answer to the nearest​ dollar.) A. ​$130 B. ​$150 C. ​$65 D. ​$166

Answer 1

D. ​$166

Step-by-step explanation:

The computation of the unit product cost is shown below:

= Direct material per unit + direct labor per unit + Variable manufacturing overhead per unit + Fixed manufacturing overhead ​ per unit

= $45 per unit + $20 per unit + $65 per unit + $35.71 per unit

= 165.71

The fixed manufacturing overhead per unit is computed by

= Fixed manufacturing overhead ​cost ÷ number of units produced

= $500,000 ÷ 14,000 units

= $35.71