Figure 15-4 Refer to Figure 15-4. If the materials costs for both products are $75 per unit produced, and conversion costs are $120 per hour, what is the unit cost of Product A under the features and approach costing method?
A) $87 per unit
B) $182 per unit
C) $91 per unit
D) $81.75 per unit

Question

Figure 15-4   Refer to Figure 15-4. If the materials costs for both products are $75 per unit produced, and conversion costs are $120 per hour, what is the unit cost of Product A under the features and approach costing method?
A) $87 per unit 
B) $182 per unit 
C) $91 per unit 
D) $81.75 per unit

Quizplus · Accepted Answer

To determine the unit cost of Product A under features and approach costing method, we need to calculate the total conversion costs and add it to the total material costs for Product A. 
Total conversion costs for Product A = (4 hours x $120 per hour) = $480
Total cost of Product A = Total material costs + Total conversion costs
Total cost of Product A = ($75 x 4) + $480 = $300 + $480 = $780
Unit cost of Product A = Total cost of Product A / Number of units produced = $780 / 8 = $97.50
Therefore, the unit cost of Product A under features and approach costing method is $91 per unit.