Use the information below to answer the following question(s).Honda Heaven produces and sells an auto part for $20.00 per unit.Direct materials are $8 per unit, while direct manufacturing labour averages $1.50 per unit.Variable manufacturing overhead is $0.50 per unit and fixed manufacturing overhead is $250,000 per year.Administrative expenses, all fixed, run $90,000 per year, with sales commissions of $2 per part.Production is 100,000 parts per year.And this year, 75,000 boxes were sold.
-What is Honda Heaven's inventoriable cost per box using absorption costing?
A)$9.50
B)$10.00
C)$12.50
D)$13.40
E)$15.40

Question

Quizplus · Accepted Answer

Under absorption costing, the inventoriable cost per unit includes direct materials, direct labor, variable manufacturing overhead, and a portion of fixed manufacturing overhead. The calculation is: $8 (direct materials) + $1.50 (direct labor) + $0.50 (variable manufacturing overhead) + ($250,000 fixed manufacturing overhead / 100,000 units produced) = $12.50 per unit.

Use the Information Below to Answer the Following Question(s)