Hossack Corporation produces a single product and has the following cost structure: The unit product cost under absorption costing is:
A)$231 per unit
B)$103 per unit
C)$133 per unit
D)$102 per unit

Question

Hossack Corporation produces a single product and has the following cost structure:  The unit product cost under absorption costing is:
A)$231 per unit 
B)$103 per unit 
C)$133 per unit 
D)$102 per unit

Quizplus · Accepted Answer

Under absorption costing, the unit product cost includes all of the manufacturing costs (variable and fixed) associated with producing one unit of the product. The unit product cost is calculated as follows:

Direct materials per unit + Direct labor per unit + Manufacturing overhead per unit

= $32 + $36 + $65

= $133 per unit.

Therefore, the correct answer is C ($133 per unit).

Hossack Corporation Produces a Single Product and Has the Following