Question

Production information for month was: Number of units produced 30, 000 Number of units sold 28,000 Selling price $20 Beginning inventory 0 Fixed selling and administrative costs $ 20,000 Fixed manufacturing overhead $ 150,000 Direct materials cost per unit 2 Direct manufacturing labor 6 Variable manufacturing overhead per unit 4 Variable selling expenses per unit 2 FMOH per unit 5 ($150,000 : 30,000 =$5) What is cost per unit under Absorption costing method?

Answer 1

$17

Step-by-step explanation:

The computation of the cost per under Absorption costing method is shown below:

= direct labor per unit+ direct materials per unit + variable manufacturing overhead per unit + fixed manufacturing overhead per unit

where,

= $2 + $6 + $4 + $5

= $17

We do not considered the selling and admin expenses and the same is ignored