A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: What is the absorption costing unit product cost for the month?
A)$124 per unit
B)$132 per unit
C)$113 per unit
D)$143 per unit

Question

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:  What is the absorption costing unit product cost for the month?
A)$124 per unit 
B)$132 per unit 
C)$113 per unit 
D)$143 per unit

Quizplus · Accepted Answer

Absorption costing unit product cost = (Total manufacturing costs + selling and administrative expenses)/Number of units produced
Total manufacturing costs = Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead
= $37,800 + $33,750 + ($1.25 × 27,000) + ($16,875/5,400 units produced)
= $37,800 + $33,750 + $33,750 + $3,125
= $108,425
Absorption costing unit product cost = ($108,425 + $16,875)/5,400 = $132 per unit. Therefore, the correct answer is B. 11ea7998_5dad_e9ee_911b_05c4e352a97a_TB2627_00_TB2627_00

A Manufacturing Company That Produces a Single Product Has Provided