Question

Vijay Company reports the following information regarding its production costs. Direct materials $ 10 per unit Direct labor $ 20 per unit Overhead costs for the year Variable overhead $ 10 per unit Fixed overhead $ 160,000 Units produced 20,000 units

Compute its product cost per unit under absorption costing.
Production cost per unit

Answer 1

$48 per unit

Step-by-step explanation:

Given the above data, we need to find the value of unitary fixed overhead.

Unitary fixed overhead = $160,000 / 20,000 = $8

Now, we can then calculate unitary cost of production

Unitary cost = Direct material + Direct labor + Total overhead

Unitary cost = $10 + $20 + $10 + $8

Unitary cost = $48 per unit