Use the information below to answer the following question(s).Balloon Arrangements produces balloon bouquets.The following information has been provided by management:

-What is the total cost per bouquet if absorption costing is used?
A)$5.50
B)$4.75
C)$3.75
D)$2.50
E)$1.98

Question

Use the information below to answer the following question(s).Balloon Arrangements produces balloon bouquets.The following information has been provided by management:
 
-What is the total cost per bouquet if absorption costing is used?
A)$5.50 
B)$4.75 
C)$3.75 
D)$2.50 
E)$1.98

Quizplus · Accepted Answer

The total cost per bouquet if absorption costing is used is calculated as follows:
Direct materials per unit = $1.25
Direct labor per unit = $1.50
Manufacturing overhead per unit = ($0.75 + $0.20) = $0.95
Total cost per unit = $1.25 + $1.50 + $0.95 = $3.70
Selling and administrative expenses per unit = $1.80
Total cost per unit under absorption costing = $3.70 + $1.80 = $5.50.

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