Question

The following cost behavior patterns describe anticipated manufacturing costs for 2013: raw material, $8.10/unit; direct labor, $11.10/unit; and manufacturing overhead, $373,100 $9.10/unit. Required: If anticipated production for 2013 is 41,000 units, calculate the unit cost using variable costing and absorption costing. (Round your answers to 2 decimal places.)

Answer 1

Variable costing $28.3

Absorption costing $37.4

Step-by-step explanation:

Calculation to determine the unit cost using variable costing and absorption costing.

VARIABLE COSTING

Material $8.10/unit

Direct labor $11.10/unit;

Variable manufacturing overhead per unit $9.10/unit

Units cost $28.3

ABSORPTION COSTING

Material $8.10/unit

Direct labor $11.10/unit;

Variable manufacturing overhead per unit $9.10/unit.

Fixed manufacturing overhead per unit $9.10/unit.

($373,100 ÷ 41,000 units)

Units cost $37.4

Therefore the unit cost using variable costing and absorption costing are:

Variable costing $28.3

Absorption costing $37.4