Question

Sea Company reports the following information regarding its production costs: Units produced 48,000 units Direct labor $ 41 per unit Direct materials $ 34 per unit Variable overhead $ 23 per unit Fixed overhead $ 120,000 in total Compute the product cost per unit under absorption costing.

Answer 1

Answer:

$100.50 per unit

Explanation:

The computation of the product cost per unit under absorption costing is shown below:

= Direct labor per unit + direct materials per unit + variable overhead per unit + fixed overhead per unit

where,

fixed overhead per unit is

= $120,000 ÷ 48,000 units

= $2.5

So, the product cost per unit is

= $41 per unit + $34 per unit + $23 per unit + $2.5 per unit

= $100.50 per unit