(Appendix 5A)Prehn Corporation manufactures and sells one product.The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative costs.During its first year of operations, the company produced 36, 000 units and sold 30, 000 units.The company's only product is sold for $251 per unit. Assume that the company uses an absorption costing system that assigns $28 of direct labor cost and $70 of fixed manufacturing overhead to each unit that is produced.The unit product cost under this costing system is:
A)$81 per unit
B)$109 per unit
C)$227 per unit
D)$179 per unit

Question

(Appendix 5A)Prehn Corporation manufactures and sells one product.The following information pertains to the company's first year of operations:  The company does not have any variable manufacturing overhead costs or variable selling and administrative costs.During its first year of operations, the company produced 36, 000 units and sold 30, 000 units.The company's only product is sold for $251 per unit. Assume that the company uses an absorption costing system that assigns $28 of direct labor cost and $70 of fixed manufacturing overhead to each unit that is produced.The unit product cost under this costing system is:
A)$81 per unit 
B)$109 per unit 
C)$227 per unit 
D)$179 per unit

Quizplus · Accepted Answer

The Answer of (Appendix 5A)Prehn Corporation manufactures and sells one product.The following information pertains to the company's first year of operations:  The company does not have any variable manufacturing overhead costs or variable selling and administrative costs.During its first year of operations, the company produced 36, 000 units and sold 30, 000 units.The company's only product is sold for $251 per unit. Assume that the company uses an absorption costing system that assigns $28 of direct labor cost and $70 of fixed manufacturing overhead to each unit that is produced.The unit product cost under this costing system is:
A)$81 per unit 
B)$109 per unit 
C)$227 per unit 
D)$179 per unit

(Appendix 5A)Prehn Corporation Manufactures and Sells One Product