Question

Units produced 1,000 Direct materials $ 6 Direct labor $ 10 Fixed overhead $ 6,000 Variable overhead $ 6 Fixed selling and administrative $ 2,000 Variable selling and administrative $ 2 The total product cost per unit under absorption costing is:

Answer 1

Unit product cost= $28

Step-by-step explanation:

Giving the following information:

Units produced 1,000

Direct materials= $6

Direct labor= $10

Fixed overhead= $6,000

Variable overhead= $6

Under the absorption costing method, the unitary product cost is calculated using the direct material, direct labor, and unitary total overhead.

First, we need to calculate the unitary fixed overhead:

Unitary fixed overhead= 6,000/1,000= $6

Unit product cost= 6 + 10 + (6+6)= $28