Question

MC Qu. 168 A manufacturer reports the following costs to produce... A manufacturer reports the following costs to produce 23,000 units in its first year of operations: Direct materials, $23 per unit, Direct labor, $19 per unit, Variable overhead, $276,000, and Fixed overhead, $322,000. The total product cost per unit under absorption costing is:

Answer 1

Unitary product cost= $68

Step-by-step explanation:

Giving the following information:

23,000 units

Direct materials= $23 per unit

Direct labor= $19 per unit

Variable overhead= $276,000

Fixed overhead, $322,000

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

Fixed unitary overhead= 322,000/23,000= $14

Unitary variable overhead= 276,000/23,000= $12

Total = $26

Unitary product cost= 23 + 19 + 26= $68