Answer:
a. Calculate the unit cost for each of these four costs. Round your answers to the nearest cent.
Direct materials= $4 / unit
Direct labor= $5.07 / unit
Variable overhead = $0.78 / unit
Fixed overhead = $2.73 / unit
b. Calculate the cost of one unit of product under absorption costing. Round your answer to the nearest cent.
$12.58
c. How many units are in ending inventory?
2,000 units
d. Calculate the cost of ending inventory under absorption costing.
$25,160
Explanation:
<u>a.</u>
No. of unit produced = 20,000
Direct materials = 80,000 / 20,000 = $4 / unit
Direct labor = 101,400 / 20,000 = $5.07 / unit
Variable overhead = 15,600 / 20,000 = $0.78 / unit
Fixed overhead = 54,600 / 20,000 = $2.73 / unit
<u>b.</u>
Cost of one unit of product = 4+5.07+0.78+2.73 = $12.58
<u>c.</u>
Closing inventory = 20,000-18,000 = 2,000 units
<u>d.</u>
Cost of ending inventory = 2,000 x 12.58 = $25,160
