Given the following data, calculate the total product cost per unit under absorption costing. $\begin{array}{|l|c|}
\hline \text { Direct labor } & \$ 3.50 \text { per unit } \
\hline \text { Direct materials } & \$ 1.25 \text { per unit } \
\hline \text { Overhead } & \
\hline \text { Total variable overhead } & \$ 41,400 \
\hline \text { Total fixed overhead } & \$ 150,000 \
\hline & \
\hline \text { Expected units to be produced } & 18,000 \text { units } \
\hline
\end{array}$
A)$4.75 per unit
B)$7.05 per unit
C)$13.08 per unit
D)$15.38 per unit
E)$16 per unit

Question

Quizplus · Accepted Answer

Under absorption costing, all production costs (both variable and fixed) are assigned to units of production. To calculate the total product cost per unit, we need to use the formula:
Total Product Cost = Direct Materials + Direct Labor + Total Overhead
Total Overhead = Total Variable Overhead + Total Fixed Overhead

Using the given data:
Total Variable Overhead = $41,400
Total Fixed Overhead = $150,000
Expected Units to be Produced = 18,000 units

Therefore,
Total Overhead = $41,400 + $150,000
Total Overhead = $191,400

Total Product Cost = $1.25 + $3.50 + $191,400/18,000
Total Product Cost = $4.75 + $10.63
Total Product Cost = $15.38

Hence, the total product cost per unit under absorption costing is $15.38 per unit. Therefore, the correct answer is D.

Given the Following Data, Calculate the Total Product Cost Per