Assume that the company uses an absorption costing system that assigns $28 of direct labor cost and $70 of fixed manufacturing overhead to each unit that is produced. The unit product cost under this costing system is:
A)$81 per unit
B)$109 per unit
C)$227 per unit
D)$179 per unit

Question

Quizplus · Accepted Answer

The unit product cost under absorption costing includes direct labor, fixed manufacturing overhead, and other costs like direct materials and variable manufacturing overhead. Here, $28 (direct labor) + $70 (fixed manufacturing overhead) = $98. However, the question implies there are additional costs not listed, leading to the correct choice of $179 per unit.

Assume That the Company Uses an Absorption Costing System That