Burns Company incurred the following costs during the year: direct materials $21

Question

Burns Company incurred the following costs during the year: direct materials $21.50 per unit; direct labor $16.40 per unit; variable manufacturing overhead $17.90 per unit; variable selling and administrative costs $8.70 per unit; fixed manufacturing overhead $128,000; and fixed selling and administrative costs $14,000. Burns produced 8,000 units and sold 6000 units.

Determine the manufacturing cost per unit under (a) absorption costing and (b) variable costing. (Round answers to 2 decimal places, e.g. 52.75.)

Manufacturing cost

Manufacturing cost

Explanation / Answer

(a) (b) Absorption Costing Variable Costing Direct materials $21.50 $21.50 Direct labor $16.40 $16.40 Variable manufacturing overhead $17.90 $17.90 Fixed manufacturing overhead ($128,000 / 8,000) $16.00 - Manufacturing cost per unit $71.80 $55.80

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