Question

Shore Company reports the following information regarding its production cost:Units produced 38,000 units

Direct labor $28.00 per unit
Direct materials $29.00 per unit
Variable overhead $760,000 in total
Fixed overhead $136,420 in total
Compute production cost per unit under absorption costing.

Answer 1

Production cost per unit $80.59

Step-by-step explanation:

The computation of the production cost per unit using absorption costing is shown below:

Direct labor per unit $28

Direct material per unit $29

Variable overhead per unit $20 ($760,000 ÷ 38,000 units)

Fixed overhead per unit $3.59 ($136,420 ÷ 38,000 units)

Production cost per unit $80.59

We simply added all the cost per unit so that the production cost per unit could come