Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Units in beginning inventory 0
Units produced 250
Units sold 225
Units in ending inventory 25
Variable costs per unit:
Direct materials $100
Direct labor $320
Variable manufacturing overhead $40
Variable selling and administrative $20
Fixed costs:
Fixed manufacturing overhead $60,000
Fixed selling and administrative $20,000
a) Under absorption costing the fixed overhead gets allocated to the product cost:
Product cost= direct material + direct labor + variable overhead + fixed overhead
Unitary cost= 100 + 320 + 40 + (60,000/250 units)= $700 per unit
b) In variable costing, the fixed overhead is a period cost:
Unitary cost= direct material + direct labor + variable overhead
Unitary cost= 100 + 320 + 40= $460
