Beamish Incorporated, which produces a single product, has provided the following data for its most recent month of operations: There were no beginning or ending inventories. The absorption costing unit product cost was:
A) $132 per unit
B) $168 per unit
C) $135 per unit
D) $248 per unit

Question

Beamish Incorporated, which produces a single product, has provided the following data for its most recent month of operations:  There were no beginning or ending inventories. The absorption costing unit product cost was:
A) $132 per unit 
B) $168 per unit 
C) $135 per unit 
D) $248 per unit

Quizplus · Accepted Answer

The absorption costing unit product cost is calculated by adding up all the variable and fixed costs per unit.

Variable cost per unit:
Direct materials per unit: $40
Direct labor per unit: $28
Variable manufacturing overhead per unit: $6
Total variable cost per unit: $74

Fixed cost per unit:
Fixed manufacturing overhead per unit: $94
Total cost per unit:
Variable cost per unit + Fixed cost per unit = $74 + $94 = $168

Therefore, the absorption costing unit product cost is $168 per unit, so the correct answer is B.

Beamish Incorporated, Which Produces a Single Product, Has Provided the Following