Time Again LLC produces and sells a mantel clock for $100 per unit. In 2017, 41,000 clocks were produced and 37,000 were sold. Other information for the year includes:

What is the inventoriable cost per unit using absorption costing?
A) $49.00
B) $53.00
C) $117.00
D) $106.00

Question

Time Again LLC produces and sells a mantel clock for $100 per unit. In 2017, 41,000 clocks were produced and 37,000 were sold. Other information for the year includes:

What is the inventoriable cost per unit using absorption costing?
A) $49.00 
B) $53.00 
C) $117.00 
D) $106.00

Quizplus · Accepted Answer

Absorption costing considers all variable manufacturing costs and all fixed manufacturing costs as inventoriable costs. Therefore, in this case, direct materials, direct manufacturing labor, variable manufacturing costs, and fixed manufacturing costs will be considered as inventoriable cost. The total inventoriable cost = ($42 + $7 + $4.00 + $64.00) = $117.00.

Time Again LLC Produces and Sells a Mantel Clock for $100