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Lone Star 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:

$55.
$65.

some other amount.

$84.
$35.

User Zdd
by
8.0k points

1 Answer

6 votes

Answer:

$84

Step-by-step explanation:

The computation of each unit of the company's inventory under absorption costing is shown below:

= Direct material used + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead

= $12 + $18 + $25 + $29

= $84

We simply added the first four-unit cost through which total unit cost would come

All other information which is given is not relevant. Hence, ignored it

User Abhuse
by
8.7k points

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