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Amanda [17]
3 years ago
15

Toys Unlimited has the following cost data available. Direct Materials are $99 per unit. Direct Labor is $55 per unit. Variable

Manufacturing Costs are $25 per unit. Fixed Manufacturing Costs are $200,000. Toys Unlimited sold 3,500 units. They produced 4,000 units. Using Absorption costing, what is the production cost per unit?a. $154b. $179c. $229d. $236
Business
1 answer:
r-ruslan [8.4K]3 years ago
5 0

Answer:

c. $229

Explanation:

To compute the total absorption cost per unit we do the following,

Absorption of fixed costs = Fixed costs / units produced

Absorption cost = 200,000 / 4000 = $50/unit

Total cost of each individual unit = 99 + 55 + 25 + 50 = $229

This includes direct material, direct labor, manufacturing overhead and the fixed absorption cost.

With absorption costing we take all the goods produced in a period as denominator for the Fixed costs.

Hope that helps.

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