Question

Calculate the unit product cost under absorption costing using the following information.

Direct materials: $50/unit
Direct labor: $75/Unit
Variable manufacturing overhead:$27/Unit
Fixed manufacturing overhead: $30,000
Units produced: 10,000
Units sold: 6,000

Answer 1

See below

Step-by-step explanation:

With regards to the above, the unit product cost is calculated as;

= Fixed manufacturing overhead / units produced

Given that;

Fixed manufacturing overhead = $30,000

Unit produced = 10,000

Then,

Units product cost under absorption costing ;

= $30,000 / 10,000

= $3 unit product cost under absorption costing