Answer:
$119,200
Explanation:
The Absorption Costing method is recommended by GAAP or IFRS for financial reporting instead of Variable Costing method.
Thus to calculate product costs under absorption costing, we add the total of all manufacturing costs (Variable and Fixed),
Non - Manufacturing costs are treated as Period Costs which are expensed in the Income Statement.
Direct materials ($ 5.30 x 8,000 units) $42,400
Direct labor ($ 3.75 x 8,000 units) $30,000
Variable manufacturing overhead ($ 1.35 x 8,000 units) $10,800
Fixed manufacturing overhead $ 36,000
Total Product Cost $119,200
therefore,
The total amount of product costs incurred to make 8,000 units is $119,200.
