CoolBreeze Manufacturing produces a single product, a tabletop fan. They reported the following information from their operations last period:
Under absorption costing what was the per-unit cost of the units produced?
A) $23.75
B) $11.25
C) $8.75
D) $12.50
E) None of the above

Question

CoolBreeze Manufacturing produces a single product, a tabletop fan. They reported the following information from their operations last period:
 Under absorption costing what was the per-unit cost of the units produced?
A) $23.75 
B) $11.25 
C) $8.75 
D) $12.50 
E) None of the above

Quizplus · Accepted Answer

Total costs applied under absorption costing = Direct Material + Direct Labor + Variable + Fixed overhead
= 50,000 + 37,500 + 25,000 + 125,000
= $237,500
Cost per unit = $237,500 / 10,000 units = $23.75 per unit

CoolBreeze Manufacturing Produces a Single Product, a Tabletop Fan