Question

Total and Unit Product Cost Martinez Manufacturing Inc. showed the following costs for last month: Direct materials $7,000 Direct labor 3,000 Manufacturing overhead 2,000 Selling expense 8,000 Last month, 4,000 units were produced and sold. Required: 1. Classify each of the costs as product cost or period cost. Direct materials Product cost Direct labor Product cost Manufacturing overhead Product cost Selling expense Period cost 2. What is the total product cost for last month? $ 4,000 3. What is the unit product cost for last month? $ per unit

Answer 1

Answer and Explanation:

1. The classification of estimated manufacturing overhead is shown below:-

Direct materials = Product cost

Direct labor = Product cost

Manufacturing overhead = Product cost

Selling expense = Period cost

2. The computation of total product cost for last month is shown below:-

= Direct materials + direct labors + manufacturing overhead

= $7,000 + $3,000 + $2,000

= $12,000

3. And, the unit product cost is

= Total product cost ÷ number of units

= $12,000 ÷ 4,000 units

= $3 per unit