Mentor Corp.has provided the following information for the current year:
-Calculate the unit product cost using absorption costing.
A)$245
B)$275
C)$55
D)$145
E)$125

Question

Mentor Corp.has provided the following information for the current year: 
-Calculate the unit product cost using absorption costing.
A)$245 
B)$275 
C)$55 
D)$145 
E)$125

Quizplus · Accepted Answer

The unit product cost using absorption costing is calculated by taking the total manufacturing costs (direct materials, direct labor, and overhead) and dividing it by the number of units produced. Using the information provided, the total manufacturing costs are $980,000 ($350,000 + $280,000 + $350,000). The number of units produced is 4,000. Therefore, the unit product cost is $245 ($980,000 ÷ 4,000).