Question

Vaughn Manufacturing sells its product for $60 per unit. During 2019, it produced 60000 units and sold 50000 units (there was no beginning inventory). Costs per unit are: direct materials $14, direct labor $15, and variable overhead $5. Fixed costs are: $720000 manufacturing overhead, and $90000 selling and administrative expenses. The per unit manufacturing cost under absorption costing is $46. $29. $48. $34.

Answer 1

$36

Step-by-step explanation:

The calculation of per unit manufacturing cost is shown below:-

For computing the variable cost per unit first we need to compute the variable cost per unit and fixed cost per unit

Variable cost per unit = Direct materials + Direct labor + Variable overhead

= $14 + $15 + $5

= $24

Fixed cost per unit = Fixed costs ÷ Units manufactured

= $720000 ÷ 60,000

= $12

Manufacturing cost per unit = Variable Cost per Unit + Fixed Cost Per Unit

= $24 + $12

= $36