I need help in the process to to calculate per unit. below are suggestions, but

Question

I need help in the process to to calculate per unit. below are suggestions, but I am still not coming up with correct answer.

Required:

Calculate the unit product cost, assuming that the company uses absorption costing.
$   per unit

I need help in the process to to calculate per unit. below are suggestions, but I am still not coming up with correct answer.

Lisa's Lockets manufactures a single product, a diamond locket. Last year, the company produced 4,000 lockets and sold 3,500 of them. They had no lockets at the beginning of the year. The company has the following costs:

Required:

Calculate the unit product cost, assuming that the company uses absorption costing.
$   per unit

I need help in the process to calculate per unit. below are suggestions, but I am still not coming up with correct answer. Lisa's Lockets manufactures a single product, a diamond locket. Last year, the company produced 4,000 lockets and sold 3,500 of them. They had no lockets at the beginning of the year. The company has the following costs: Required: Calculate the unit product cost, assuming that the company uses absorption costing. per unit Hide Feedback Check My Work Feedback Absorption Costing: Net Sales - COGS = Gross Profit - Selling & Administrative Costs = Net Operating Income. (COGS = DM + DL + VMOH + FMOH). Add variable unit production costs and fixed unit production costs. Calculate fixed unit by dividing production costs by units produced.

Explanation / Answer

Product costs include all the costs to make the product. Selling and admin costs are period costs, not product costs.

The products costs in this problem are the variable production costs and fixed production costs.

fixed product costs = $12,000 total

12,000/4,000 = $3.00 per unit

variable product costs = $4.00 per unit

unit product cost = $3 + $4 = $7

answer: 7.00

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