Bryans Corporation has provided the following data for its two most recent years

Question

Bryans Corporation has provided the following data for its two most recent years of operation: Selling price per unit $ 53 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $ 13 Direct labor $ 6 Variable manufacturing overhead $ 5 Fixed manufacturing overhead per year $ 63,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $ 4 Fixed selling and administrative expense per year $ 71,000 Year 1 Year 2 Units in beginning inventory 0 3,000 Units produced during the year 9,000 7,000 Units sold during the year 6,000 7,000 Units in ending inventory 3,000 3,000 The unit product cost under absorption costing in Year 1 is closest to: Garrison 16e Rechecks 2017-09-30 Multiple Choice $24.00 $7.00 $35.00 $31.00

Explanation / Answer

Calculate unit product cost for year 1 :

so answer is d) $31.00

Absorption costing Direct material 13 Direct labour 6 Variable manufacturing overhead 5 Fixed manufacturing overhead (63000/9000) 7 Unit product cost 31

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