Question

Income statement under absorption costing and variable costing

Answer 1

Answer:

unitary product cost= $102

Explanation:

Giving the following information:

Manufacturing costs Direct materials per unit $60

Direct labor per unit $22

Variable overhead per unit $8

Fixed overhead for the year $528,000

Units produced= 44,000

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.

First, we need to calculate the unitary fixed overhead:

Unitary fixed overhead= 528,000/44,000= $12

Now, the unitary product cost:

unitary product cost= 60 + 22 + 8 + 12

unitary product cost= $102