A manufacturing company that produces a single product has provided the followin

Question

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: Units in beginning inventory Units produced Units sold Units in ending inventory 7,300 .200 100 Variable costs per unit Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative 29 $49 $5 $4 Fixed costs Fixed manufacturing overhead Fixed selling and administrative 94,900 $79,200 What is the absorption costing unit product cost for the month? A. $100 per unit B. $83 per unit C. $96 per unit D. $87 per unit

Explanation / Answer

Fixed manufacturing overhead cost/unit=(94900/7300)=$13

Hence unit product cost=Direct material+Direct labor+Variable manufacturing overhead+Fixed manufacturing overhead

=(29+49+5+13)

which is equal to

$96(C)

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