Question

Bailey Company incurred the following costs in manufacturing desk calculators: Direct materials $18 Indirect materials (variable) 3 Direct labor 9 Indirect labor (variable) 7 Other variable factory overhead 13 Fixed factory overhead 34 Variable selling expenses 26 Fixed selling expenses 12 During the period, the company produced and sold 2,000 units. What is the inventory cost per unit using absorption costing

Answer 1

$84

Step-by-step explanation:

Calculation to determine the inventory cost per unit using absorption costing

Direct materials $18

Indirect materials (variable) $3

Direct labor $9

Indirect labor (variable) $7

Other variable factory overhead $13

Fixed factory overhead $34

Inventory cost per unit $84

($18 + $3 + $9 + $7 + $13 + $34 = $84

Therefore the inventory cost per unit using absorption costing is $84