Gloria's Decorating produces and sells a mantel clock for $100 per unit. In 2015, 42,125 clocks were produced and 37,958 were sold. Other information for the year includes:
$\begin{array}{ll}
\text { Direct materials } & \$ 40.00 \text { per unit } \
\text { Direct manufacturing labor } & \$ 5.00 \text { per unit } \
\text { Variable manufacturing costs } & \$ 7.50 \text { per unit } \
\text { Sales commissions } & \$ 12.50 \text { per part } \
\text { Fixed manufacturing costs } & \$ 62.50 \text { per unit } \
\text { Administrative expenses all fixed } & \$ 37.50 \text { per unit }
\end{array}$
-What is the inventoriable cost per unit using absorption costing?
A) $45.00
B) $52.50
C) $115.00
D) $80.00

Question

Gloria's Decorating produces and sells a mantel clock for $100 per unit. In 2015, 42,125 clocks were produced and 37,958 were sold. Other information for the year includes:
 $\begin{array}{ll}
\text { Direct materials } & \$ 40.00 \text { per unit } \
\text { Direct manufacturing labor } & \$ 5.00 \text { per unit } \
\text { Variable manufacturing costs } & \$ 7.50 \text { per unit } \
\text { Sales commissions } & \$ 12.50 \text { per part } \
\text { Fixed manufacturing costs } & \$ 62.50 \text { per unit } \
\text { Administrative expenses all fixed } & \$ 37.50 \text { per unit }
\end{array}$
-What is the inventoriable cost per unit using absorption costing?
A) $45.00
B) $52.50
C) $115.00
D) $80.00

Quizplus · Accepted Answer

Under absorption costing, the inventoriable cost per unit includes direct materials, direct manufacturing labor, variable manufacturing costs, and fixed manufacturing costs. Therefore, the inventoriable cost per unit is $40.00 + $5.00 + $7.50 + $62.50 = $115.00.

Gloria's Decorating Produces and Sells a Mantel Clock for $100