Sproull Inc., which produces a single product, has provided the following data f

Question

Sproull Inc., which produces a single product, has provided the following data for its most recent month of operation: Number of units produced 7,700 Variable costs per unit: Direct materials $ 157 Direct labor $ 81 Variable manufacturing overhead $ 3 Variable selling and administrative expenses $ 9 Fixed costs: Fixed manufacturing overhead $ 415,800 Fixed selling and administrative expenses $ 146,300 The company had no beginning or ending inventories.

Compute the unit product cost under absorption costing

Compute the unit product cost under variable costing.

Explanation / Answer

a Direct materials 157 Direct labor 81 Variable manufacturing overhead 3 Fixed manufacturing overhead 54 =415800/7700 Unit product cost 295 b Direct materials 157 Direct labor 81 Variable manufacturing overhead 3 Unit product cost 241

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