Macho Enterprises experienced the following costs in 2014: $\begin{array}{lr}
\text { Direct materials } & \$ 2.65 \text { per unit } \
\text { Direct labor } & \$ 1.80 \text { per unit } \
\text { Variable manufacturing overhead } & \$ 3.25 \text { per unit } \
\text { Variable selling } & \$ 1.15 \text { per unit } \
\text { Fixed manufacturing overhead } & \$ 94,000 \
\text { Fixed selling } & \$ 35,000 \
\text { Fixed administrative } & \$ 10,000
\end{array}$ During the year, the company manufactured 47,000 units and sold 40,000 units. How much is the unit product cost using full costing?

Question

Quizplus · Accepted Answer

Under full costing, the unit product cost includes direct materials, direct labor, variable manufacturing overhead, and fixed manufacturing overhead. The fixed manufacturing overhead per unit is $94,000 / 47,000 units = $2.00. Therefore, the unit product cost is $2.65 + $1.80 + $3.25 + $2.00 = $9.70.

Macho Enterprises Experienced the Following Costs in 2014 During the Year, the Company Manufactured 47,000 Units and Sold