Asked by Austin Parker on Jun 07, 2024
Verified
The unit product cost under absorption costing was:
A) $170 per unit
B) $115 per unit
C) $255 per unit
D) $110 per unit
Unit Product Cost
The total cost (direct materials, direct labor, and manufacturing overhead) divided by the number of units produced.
- Calculate unit product costs under both variable costing and absorption costing methods.
Verified Answer
ZK
Zybrea KnightJun 08, 2024
Final Answer :
A
Explanation :
The unit product cost under absorption costing includes both variable cost and fixed cost per unit. From the data given, total variable manufacturing cost is $45 per unit and total fixed manufacturing cost is $810,000. The number of units produced is 12,000.
Therefore, the unit product cost under absorption costing is calculated as:
Unit product cost = (Total variable manufacturing cost + Total fixed manufacturing cost)/Number of units produced
Unit product cost = ($45 + $810,000)/12,000
Unit product cost = $115 per unit
Hence, choice B is the unit product cost under absorption costing.
Therefore, the unit product cost under absorption costing is calculated as:
Unit product cost = (Total variable manufacturing cost + Total fixed manufacturing cost)/Number of units produced
Unit product cost = ($45 + $810,000)/12,000
Unit product cost = $115 per unit
Hence, choice B is the unit product cost under absorption costing.
Explanation : 
Learning Objectives
- Calculate unit product costs under both variable costing and absorption costing methods.