Question

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: Units in beginning inventory 0 Units produced 2,900 Units sold 2,600 Units in ending inventory 300 Variable costs per unit: Direct materials $ 49 Direct labor $ 58 Variable manufacturing overhead $ 6 Variable selling and administrative expense $ 11 Fixed costs: Fixed manufacturing overhead $ 55,100 Fixed selling and administrative expense $ 18,200 What is the absorption costing unit product cost for the month

Answer 1

$132

Step-by-step explanation:

The computation of absorption costing unit product cost is given below:-

Absorption costing unit product cost = Direct Materials + Direct Labor + Variable Manufacturing Overhead + Fixed manufacturing overhead per unit

= $49 + $58 + $6 + ($55,100 ÷ 2,900)

= $49 + $58 + $6 + $19

= $132

So, for computing the Absorption costing unit product cost we simply applied the above formula.