Yoshihara Corporation produces a single product and has the following cost struc

Question

Yoshihara Corporation produces a single product and has the following cost structure: Number of units produced each year is 4,000. Variable cost per unit for direct materials is $62, direct labor is $71, variable manufacturing overhead is $7 and variable selling and administrative expense is $6. Fixed costs for the year are fixed manufacturing overhead of $228,000 and fixed selling and administrative expense of $96,000. The absorption costing unit product cost is:

a. $140, b. $197, c. $133, d. $227

Explanation / Answer

227

So, answer is( d.) $227

Unit product cost in Absorption costing Number of units produced 4000 Variable cost per unit Direct material 62 Direct labour 71 manufacturing overhead 7 Selling & Administrative cost 6 Total Variable cost 584000 Fixed cost Manufacturing overhead 228000 Selling & Administrative cost 96000 Total fixed cost 324000 Total Cost 908000 Cost per unit

227

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