Question

Smores Co. Smores Co. produces and sells many camping products. The company has just opened a new plant to produce a cushy sleeping bag that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation: Beginning inventory 0 Units produced 47,000 Units sold 42,000 Selling price per unit $81 Selling and administrative expenses: Variable per unit $2 Fixed (total) $561,000 Manufacturing costs: Direct materials cost per unit $17 Direct labor cost per unit $8 Variable manufacturing overhead cost per unit $4 Fixed manufacturing overhead cost (total) $846,000 Management is anxious to see how profitable the new camp cot will be and has asked that an income statement be prepared for May. Assume that the company uses absorption costing. 1) What is the unit product cost

Answer 1

$29

Step-by-step explanation:

Smores corporation produces and sells many camping products

The following data was recorded during its first month of operation

Selling price per unit= 42,000

Selling and administrative expenses= $81

Units produced = 47000 units

Variable per unit= $2

Total= $561,000

Manufacturing costs

Dirct materials= $17

Direct labor= $8

Variable manufacturing overhead= $4

Therefore the unit of product cost can be calculated as follows

= Direct material + direct labor + variable manufacturing overhead

= $17 + $8 + $4

= $29

Hence the unit of product cost is $29