Question

$159 per unit $205 per unit $166 per unit $292 per unit Olds Inc., which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 10,700 Variable costs per unit: Direct materials $108 Direct labor $51 Variable manufacturing overhead $7 Variable selling and administrative expense $9 Fixed costs: Fixed manufacturing overhead $417,300 Fixed selling and administrative expense $834,600 There were no beginning or ending inventories. The absorption costing unit product cost was:

Answer 1

Answer:

Unit product cost= $204

Explanation:

Giving the following information:

Number of units produced 10,700

Variable costs per unit:

Direct materials $108

Direct labor $51

Variable manufacturing overhead $7

Fixed manufacturing overhead $417,300

Under the absorption costing method, the unit product cost is calculated using the direct material, direct labor, and total unitary overhead.

First, we need to calculate the unitary fixed manufacturing overhead

unitary fixed manufacturing overhead = 417,300/10,700= $39 per unit

Unit product cost= 108 + 51 + 7 + 39= $204