The unit product cost under absorption costing in Year 1 is closest to:

A) $38.00
B) $32.00
C) $23.00
D) $9.00

Under absorption costing, the unit product cost includes all manufacturing costs, both fixed and variable. In Year 1, the manufacturing overhead costs to be allocated are $240,000 ($80,000 fixed overhead + $160,000 variable overhead), and the total number of units produced is 10,000.
Therefore, the manufacturing overhead cost per unit is $24.00 ($240,000 ÷ 10,000 units).
Adding this to the sum of direct materials and direct labor per unit ($8 + $0), the unit product cost under absorption costing in Year 1 is $32.00.

Absorption costing unit product costs: