Answer:
Instructions are below.
Explanation:
Giving the following information:
Direct material= $14
Direct labor= 1.9 direct labor hours at $16 per direct labor hour.
Variable overhead= $1.10 per direct labor hour
Fixed overhead rate= $1.50 per direct labor hour.
Ending inventory (units)= 620
<u>We can calculate the unitary product cost using the absorption or variable costing method. The first one includes the unitary fixed overhead to the unitary product cost.</u>
<u>Absorption costing:</u>
Unitary cost= 14 + 1.9*16 + (1.1+1.5)*1.9= $49.34
Ending inventory= 49.34*620= $30,590.8
<u>Variable costing:</u>
Unitary cost= 14 + 1.9*16 + 1.1*1.9= $46.49
Ending inventory= 46.49*620= $28,823.8