Macho Enterprises experienced the following costs in 2017: $\begin{array}{lr}
\text { Direct materials } & \$ 2.65 \text { per unit } \
\text { Direct labor } & \$ 1.80 \text { per unit } \
\text { Variable manufacturing overhead } & \$ 3.25 \text { per unit } \
\text { Variable selling } & \$ 1.15 \text { per unit } \
\text { Fixed manufacturing overhead } & \$ 94,000 \
\text { Fixed selling } & \$ 35,000 \
\text { Fixed administrative } & \$ 10,000
\end{array}$ During the year, the company manufactured 47,000 units and sold 40,000 units.How much is the unit product cost using full costing?
A)$7.70
B)$9.70
C)$8.85
D)$10.85

Question

Quizplus · Accepted Answer

The unit product cost under full costing includes direct materials, direct labor, variable manufacturing overhead, and a portion of fixed manufacturing overhead. The calculation is as follows: Direct materials: $2.65 Direct labor: $1.80 Variable manufacturing overhead: $3.25 Fixed manufacturing overhead per unit: $94,000 / 47,000 units = $2.00 Total unit product cost = $2.65 + $1.80 + $3.25 + $2.00 = $9.70.

Macho Enterprises Experienced the Following Costs in 2017 During the Year, the Company Manufactured 47,000 Units and Sold