E-trax,Inc.has provided the following financial information for the year: $$\begin{array} { | l | r | }
\hline \text { Finished Goods Inventory: } & \
\hline \text { Beginning balance, in units } & 610 \
\hline \text { Units produced } & 2,800 \
\hline \text { Units sold } & \underline { 2,900 } \
\hline \text { Ending balance, in units } & \underline { 510 } \
\hline \text { Production costs: } \
\hline \begin{array} { l }
\text { Nariable manufacturing costs per } \
\text { unit }
\end{array} & \$ 50 \
\hline \text { Total fixed manufacturing costs } & \$ 42,000 \
\hline
\end{array}$$ What is the unit product cost for the year using absorption costing?

Question

E-trax,Inc.has provided the following financial information for the year: $$\begin{array} { | l | r | } 
\hline \text { Finished Goods Inventory: } & \
\hline \text { Beginning balance, in units } & 610 \
\hline \text { Units produced } & 2,800 \
\hline \text { Units sold } & \underline { 2,900 } \
\hline \text { Ending balance, in units } & \underline { 510 } \
\hline \text { Production costs: } \
\hline \begin{array} { l } 
\text { Nariable manufacturing costs per } \
\text { unit }
\end{array} & \$ 50 \
\hline \text { Total fixed manufacturing costs } & \$ 42,000 \
\hline
\end{array}$$ What is the unit product cost for the year using absorption costing?

Quizplus · Accepted Answer

Absorption costing includes both variable and fixed manufacturing costs in the unit product cost. The unit product cost is calculated by dividing the total manufacturing costs by the number of units produced. In this case, the total manufacturing costs are $50 per unit for variable manufacturing costs and $42,000 for fixed manufacturing costs, for a total of $92,000. The number of units produced is 2,800. Therefore, the unit product cost is $92,000 / 2,800 = $65.

E-Trax,Inc What Is the Unit Product Cost for the Year Using