Question

Aaker Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $168 Units in beginning inventory 0 Units produced 9,550 Units sold 8,150 Units in ending inventory 1,400 Variable costs per unit: Direct materials $35 Direct labor $66 Variable manufacturing overhead $16 Variable selling and administrative $16 Fixed costs: Fixed manufacturing overhead $229,200 Fixed selling and administrative $138,550 What is the unit product cost for the month under absorption costing

Answer 1

Unitary production cost= $141

Step-by-step explanation:

Giving the following information:

Units produced 9,550

Direct materials $35

Direct labor $66

Variable manufacturing overhead $16

Fixed manufacturing overhead= $229,200

The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

First, we need to calculate the unitary fixed manufacturing overhead:

unitary fixed manufacturing overhead= 229,200/9,550

unitary fixed manufacturing overhead= $24

Unitary production cost= 35 + 66 + 16 + 24

Unitary production cost= $141