Given the following data,calculate the total product cost per unit under absorption costing.
$\begin{array}{|l|c|}
\hline \text { Direct labor } & \$ 3.50 \text { per unit } \
\hline \text { Direct materials } & \$ 1.25 \text { per unit } \
\hline \text { Overhead } & \
\hline \text { Total variable overhead } & \$ 41,400 \
\hline \text { Total fixed overhead } & \$ 150,000 \
\hline & \
\hline \text { Expected units to be produced } & 18,000 \text { units } \
\hline
\end{array}$

A) $4.75 per unit
B) $7.05 per unit
C) $13.08 per unit
D) $15.38 per unit
E) $16 per unit

Question

Given the following data,calculate the total product cost per unit under absorption costing.
$\begin{array}{|l|c|}
\hline \text { Direct labor } & \$ 3.50 \text { per unit } \
\hline \text { Direct materials } & \$ 1.25 \text { per unit } \
\hline \text { Overhead } & \
\hline \text { Total variable overhead } & \$ 41,400 \
\hline \text { Total fixed overhead } & \$ 150,000 \
\hline & \
\hline \text { Expected units to be produced } & 18,000 \text { units } \
\hline
\end{array}$

A) $4.75 per unit
B) $7.05 per unit
C) $13.08 per unit
D) $15.38 per unit
E) $16 per unit

Quizplus · Accepted Answer

Under absorption costing, total product cost per unit includes direct labor, direct materials, variable overhead per unit, and fixed overhead per unit. Variable overhead per unit is $41,400 / 18,000 = $2.30. Fixed overhead per unit is $150,000 / 18,000 = $8.33. Total cost per unit = $3.50 + $1.25 + $2.30 + $8.33 = $15.38.

Given the Following Data,calculate the Total Product Cost Per Unit