Use the following information for questions
Papillon Co. has determined the following per unit amounts: $\begin{array}{lrlr}
\text { Direct materials } & \$ 30 & \text { Fixed selling and administrative } & \$ 60 \
\text { Direct labor } & 36 & \text { Variable overhead } & 24 \
\text { Desired ROI } & 33 & \text { Variable selling and administrative } & 15 \
\text { Fixed overhead } & 45 & &
\end{array}$
-The cost base using the absorption-cost approach is
A) $90.
B) $105.
C) $195.
D) $135.

Question

Quizplus · Accepted Answer

The absorption-cost approach includes all manufacturing costs: direct materials, direct labor, variable overhead, and fixed overhead. Therefore, the cost base is calculated as follows: Direct materials ($30) + Direct labor ($36) + Variable overhead ($24) + Fixed overhead ($45) = $135.

Use the Following Information for Questions Papillon Co -The Cost Base Using the Absorption-Cost Approach Is A) $90

Use the Following Information for Questions
Papillon Co -The Cost Base Using the Absorption-Cost Approach Is
A) $90