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VLD [36.1K]
3 years ago
9

St. Claire Manufacturing expects to produce and sell 6,000 units of Big, its only product, for $20 each. Direct material cost is

$2 per unit, direct labor cost is $8 per unit, and variable manufacturing overhead is $3 per unit. Fixed manufacturing overhead is $24,000 in total. Variable selling and administrative expenses are $1 per unit, and fixed selling and administrative costs are $3,000 in total. According to generally accepted accounting principles, inventoriable cost per unit of Big would be: Group of answer choices $18.50 per unit $17.00 per unit $13.00 per unit $14.00 per unit
Business
1 answer:
Taya2010 [7]3 years ago
5 0

Answer:

According to generally accepted accounting principles, inventoriable cost per unit of Big would be $17.00

Explanation:

Absorption Costing method is suitable for external reporting purposes and thus preferred in reporting According to the generally accepted accounting principles (GAAP)

Absorption Costing Includes Both Fixed and Variable <em>Manufacturing Overheads</em> in Product Costings Calculations

<u>Calculation of Inventory  Cost per Unit According to Absorption Costing:</u>

Direct material                                                                       2.00

Direct labor                                                                            8.00

Variable Manufacturing Overhead                                       3.00

Fixed Manufacturing Overhead ($24,000/6,000)              4.00

Inventory Cost per Unit                                                        17.00

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