Lily's Pastries produces cupcakes, which sell for $5.10 each. During the current month, Lily produced, but only sold 2700 cupcakes. The variable cost per cupcake was $3.40 and the sales commission per cupcake was $0.50. Total fixed manufacturing costs were $1700 and total fixed marketing and administrative costs were $900. What is the product cost per cupcake under absorption costing?
A)$3.93
B)$5.63
C)$5.10
D)$3.40

Question

Lily's Pastries produces cupcakes, which sell for $5.10 each. During the current month, Lily produced, but only sold 2700 cupcakes. The variable cost per cupcake was $3.40 and the sales commission per cupcake was $0.50. Total fixed manufacturing costs were $1700 and total fixed marketing and administrative costs were $900. What is the product cost per cupcake under absorption costing? 
A)$3.93 
B)$5.63 
C)$5.10 
D)$3.40

Quizplus · Accepted Answer

The Answer of Lily's Pastries produces cupcakes, which sell for $5.10 each. During the current month, Lily produced, but only sold 2700 cupcakes. The variable cost per cupcake was $3.40 and the sales commission per cupcake was $0.50. Total fixed manufacturing costs were $1700 and total fixed marketing and administrative costs were $900. What is the product cost per cupcake under absorption costing? 
A)$3.93 
B)$5.63 
C)$5.10 
D)$3.40

Lily's Pastries Produces Cupcakes, Which Sell for $5