Beamish Incorporated, which produces a single product, has provided the following data for its most recent month of operations: There were no beginning or ending inventories. The absorption costing unit product cost was:
A) $93 per unit
B) $97 per unit
C) $136 per unit
D) $194 per unit

Question

Beamish Incorporated, which produces a single product, has provided the following data for its most recent month of operations:  There were no beginning or ending inventories. The absorption costing unit product cost was:
A) $93 per unit 
B) $97 per unit 
C) $136 per unit 
D) $194 per unit

Quizplus · Accepted Answer

The absorption costing unit product cost can be calculated as follows:
Direct materials + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead = Total cost per unit

$40 + $22 + $7 + ($135,000 ÷ 15,000) = $136 per unit

Beamish Incorporated, Which Produces a Single Product, Has Provided the Following