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		0
Units produced		2,900
Units sold		2,600
Units in ending inventory		300
Variable costs per unit:
Direct materials	$	49
Direct labor	$	58
Variable manufacturing overhead	$	6
Variable selling and administrative expense	$	11
Fixed costs:
Fixed manufacturing overhead	$	55,100
Fixed selling and administrative expense	$	18,200

What is the absorption costing unit product cost for the month?

Answer 1

Unit product cost (Absorption costing)

= Direct Materials + Direct Labor + Variable Manufacturing Overhead + Fixed manufacturing overhead per unit

= 49+58+6+(55100/2900)

= 49+58+6+19

= $ 132