Answer:
cost per unit = $28.50
Explanation:
given data
beginning inventory amount = 0
Units produced = 25,000 units
Direct materials = $9 per unit
Direct labor = $11 per unit
Variable overhead = $75,000
Fixed overhead = $137,500
solution
we know that Under all absorption cost, all the type of cost is fixed or variable
so that we get cost per unit of finished goods that is
cost per unit = Total cost ÷ units produced ..............1
here
total cost = direct material + direct labor + variable overhead + fixed overhead ......................2
put here value
total cost = $9 × 25,000 units + $11 × 25,000 units + $75,000 + $137,500
total cost = $225,000 + $275,000 +$75,000 + $137,500
total cost = $712,500
so put here value in equation 1 we get
cost per unit = $712,500 ÷ 25,000
cost per unit = $28.50
so the cost per unit of finished goods under absorption costing is $28.50
