Question

Assume the following information for a company that produced and sold 10,000 units during Year 1. It also produced 15,000 units and sold 12,000 units during Year 2, while producing 12,000 units and selling 15,000 units in year 3. Per Unit Per Year Selling price $ 240 Direct materials $ 85 Direct labor $ 60 Variable manufacturing overhead $ 10 Sales commission $ 11 Fixed manufacturing overhead $ 450,000 Fixed selling and administrative expense $ 150,000 Using absorption costing, what is the unit product cost for the units produced in Year 3

Answer 1

$185

Step-by-step explanation:

Unit Cost - Absorption Costing

Hint : Consider all manufacturing costs

Total unit Cost = $ 85 + $ 60 + $ 10 + $ 450,000/ 15,000 units

= $185

Using absorption costing, the unit product cost for the units produced in Year 3 is $185