Dallavalle Corporation manufactures and sells one product. The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 32,000 units and sold 31,000 units. The company's only product is sold for $238 per unit.
Assume that the company uses an absorption costing system that assigns $10 of direct labor cost and $67 of fixed manufacturing overhead to each unit that is produced. The unit product cost under this costing system is:
A) $103 per unit
B) $214 per unit
C) $170 per unit
D) $93 per unit

Question

Dallavalle Corporation manufactures and sells one product. The following information pertains to the company's first year of operations:  The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 32,000 units and sold 31,000 units. The company's only product is sold for $238 per unit.
Assume that the company uses an absorption costing system that assigns $10 of direct labor cost and $67 of fixed manufacturing overhead to each unit that is produced. The unit product cost under this costing system is:
A) $103 per unit 
B) $214 per unit 
C) $170 per unit 
D) $93 per unit

Quizplus · Accepted Answer

Absorption costing unit product cost:
 11eacbfc_c88c_3396_8ffe_235882518c60_TB7552_00

Dallavalle Corporation Manufactures and Sells One Product