Question

Barkley Company had the followign cost data for Product X. Direct Materials $45 per unit Direct Labor 50 per unit Variable manufacturing overhead 10 per unit Fixed manufacturing overhead 30,000 per year Calculate the unit product cost using absorption costing and variable costing when production is 3,000 units.

Answer 1

Variable costing unit cost 105

Absorption costing units cost 115

Step-by-step explanation:

variable cost:

DM 45

DL 50

VMO 10

Total variable 105

Variable cost x 3,000 = 105 x 3,000 = 315,000

Absorption cost

variable + fixed = 315,000 + 30,000 = 345,000 /3