A company reports the following information for its first year of operations: If the company's cost per unit of finished goods using absorption costing is $27, how many units were produced?
A) 4,000 units.
B) 3,600 units.
C) 1,846 units.
D) 2,667 units.
E) 2,000 units.

Question

A company reports the following information for its first year of operations:  If the company's cost per unit of finished goods using absorption costing is $27, how many units were produced?
A) 4,000 units. 
B) 3,600 units. 
C) 1,846 units. 
D) 2,667 units. 
E) 2,000 units.

Quizplus · Accepted Answer

$27 = DM + DL + VOH + FOH
$27 = $9 + $5 + $7 + FOH
FOH = $6 per unit
$6 per unit × units produced = $24,000
Units produced = 4,000

A Company Reports the Following Information for Its First Year