Grover Company has the following data for the production and sale of 2,000 units.
$\begin{array}{llr}
\text { Sales price per unit } & \text {\$ 800per unit } \
\text { Fixed costs: } & & \
\text { Marketing and administrative } &\$ 400,000 \text { per period } \
\text { Manufacturing overhead } & \$ 200,000 \text { per period }\
\text { Variable costs: }\
\text { Marketing and administrative } & \$ 50 \text { per unit } \
\text { Manufacturing overhead } & \$ 80 \text { per unit } \
\text { Direct labor } & \$ 100 \text { per unit } \
\text { Direct materials } & \$ \text { 200per unit }
\end{array}$
-
What is the full cost per unit of making and selling the product?
A) $430
B) $480
C) $530
D) $730

Question

Grover Company has the following data for the production and sale of 2,000 units.
$\begin{array}{llr}
\text { Sales price per unit } & \text {\$ 800per unit } \
\text { Fixed costs: } & & \
\text { Marketing and administrative } &\$  400,000 \text { per period } \
\text { Manufacturing overhead } & \$ 200,000 \text { per period }\
\text { Variable costs: }\
\text { Marketing and administrative } & \$ 50 \text { per unit } \
\text { Manufacturing overhead } & \$  80 \text { per unit } \
\text { Direct labor } & \$  100 \text { per unit } \
\text { Direct materials } & \$  \text { 200per unit }
\end{array}$ 
-
What is the full cost per unit of making and selling the product?
A) $430
B) $480
C) $530
D) $730

Quizplus · Accepted Answer

The full cost per unit includes all variable costs and allocated fixed costs. Variable costs per unit are $50 (marketing) + $80 (manufacturing overhead) + $100 (labor) + $200 (materials) = $430. Fixed costs per unit are ($400,000 + $200,000) / 2,000 = $300. Total full cost per unit is $430 + $300 = $730.

Grover Company Has the Following Data for the Production and Sale