Question

Shore Company reports the following information regarding its production cost. Units produced 36,000 units Direct labor $ 31 per unit Direct materials $ 32 per unit Variable overhead $ 288,000 in total Fixed overhead $ 102,920 in total Compute product cost per unit under absorption costing.

Answer 1

Answer:

$73.86 per unit

Explanation:

The computation of the cost per unit under the absorption costing is as follows

= Direct material per unit + Direct labor per unit + variable overhead per unit + fixed overhead per unit

where,

Variable overhead cost per unit

= $288,000 ÷ 36,000 units

= $8 per unit

And, the fixed overhead cost per unit is

= $102,920 ÷ 36,000 units

= $2.86 per unit

So the cost per unit is

= $32 + $31 + $8 + $2.86

= $73.86 per unit