Hardee Inc., which produces a single product, has provided the following data for its most recent month of operations: There were no beginning or ending inventories. The unit product cost under absorption costing was:
A)$135 per unit
B)$30 per unit
C)$103 per unit
D)$33 per unit

Question

Hardee Inc., which produces a single product, has provided the following data for its most recent month of operations:  There were no beginning or ending inventories. The unit product cost under absorption costing was:
A)$135 per unit 
B)$30 per unit 
C)$103 per unit 
D)$33 per unit

Quizplus · Accepted Answer

The unit product cost under absorption costing can be calculated as follows:
Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead per unit = ($60 + $30 + $5 + ($80,000/4,000)) = $103 per unit.