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A company manufactures couches for hotels. It takes only bulk orders and each couch is sold...

A company manufactures couches for hotels. It takes only bulk orders and each couch is sold for $400. In the month of March, it manufactures 3200 and sells 2400 couches. Actual fixed costs are the same as the amount of fixed costs budgeted for the month. The following information is provided for the month of march: Variable manufacturing costs $130 per unit Fixed manufacturing costs $90,000 per month Fixed administration costs. $30,000 per month At the end of the month the company has an ending inventory of finished goods of 800 units. The company also incurs a sales commission of $11 per unit. What is the cost of goods sold per unit when using absorption costing?

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Answer #1

Fixed cost per unit = (90000+30000)/3200 = $37.50 per unit

Cost of goods sold per unit = Variable cost + Fixed cost + Sales commission

= $130 + 37.50 + 11

= $178.50 per unit

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