Question

Put'er There manufactures baseball gloves. Each glove requires $22 of direct materials and $18 of direct labor. Variable manufacturing overhead cost is $7 per unit and fixed manufacturing overhead cost is $19,000 in total. Variable selling and administrative costs are $11 per unit sold and fixed selling and administrative costs are $13,200. Last period, 800 gloves were produced, and 585 gloves were sold. The unit product cost is:_______.
a. $70.75 per unit.
b. $47 per unit.
c. $58 per unit.
d. $81.75 per unit.

Answer 1

Answer:

Instructions are below.

Explanation:

Giving the following information:

Each glove requires $22 of direct materials and $18 of direct labor. Variable manufacturing overhead cost is $7 per unit and fixed manufacturing overhead cost is $19,000 in total.

There are two methods to calculate the unitary production costs. The variable costing method and the absorption costing method.

The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).

Variable costing method:

Unitary product cost= 22 + 18 + 7= $47

Absorption costing method:

Unitary fixed costs= 19,000/800= 23.75

Unitary product cost= 47 + 23.75= $70.75