Comet Canisters, Inc. has collected the following data for the current year: $$\begin{array} { | l | r | l | }
\hline \text { Beginning Finished Goods Inventory } & 50 & \text { units } \
\hline \text { Units produced } & 500 & \text { units } \
\hline \text { Units sold } & 550 & \text { units } \
\hline \text { Sales price } & \$ 180 & \text { per unit } \
\hline \text { Direct materials } & \$ 16 & \text { per unit } \
\hline \text { Direct labor } & \$ 17 & \text { per unit } \
\hline \text { Variable manufacturing overhead } & \$ 10 & \text { per unit } \
\hline \text { Fixed manufacturing overhead } & \$ 10,800 & \text { per year } \
\hline \text { Variable selling and administrative costs } & \$ 4 & \text { per unit } \
\hline \text { Fixed selling and administrative costs } & \$ 12,500 & \text { per year } \
\hline
\end{array}$$ What is the unit product cost using absorption costing? (Round your answer to the nearest cent.)
A) $93.60
B) $43.00
C) $64.60
D) $48.60

Question

Comet Canisters, Inc. has collected the following data for the current year: $$\begin{array} { | l | r | l | } 
\hline \text { Beginning Finished Goods Inventory } & 50 & \text { units } \
\hline \text { Units produced } & 500 & \text { units } \
\hline \text { Units sold } & 550 & \text { units } \
\hline \text { Sales price } & \$ 180 & \text { per unit } \
\hline \text { Direct materials } & \$ 16 & \text { per unit } \
\hline \text { Direct labor } & \$ 17 & \text { per unit } \
\hline \text { Variable manufacturing overhead } & \$ 10 & \text { per unit } \
\hline \text { Fixed manufacturing overhead } & \$ 10,800 & \text { per year } \
\hline \text { Variable selling and administrative costs } & \$ 4 & \text { per unit } \
\hline \text { Fixed selling and administrative costs } & \$ 12,500 & \text { per year } \
\hline
\end{array}$$ What is the unit product cost using absorption costing? (Round your answer to the nearest cent.)
A) $93.60
B) $43.00
C) $64.60
D) $48.60

Quizplus · Accepted Answer

To calculate the unit product cost using absorption costing, we need to sum up the total manufacturing cost (direct materials, direct labor, variable manufacturing overhead, and fixed manufacturing overhead) and divide it by the total number of units produced. From the given data, we have:

Total direct materials cost = $140,000 
Total direct labor cost = $180,000 
Total variable manufacturing overhead = $70,000 
Total fixed manufacturing overhead = $160,000 
Total units produced = 8,000 units

Total manufacturing cost = $140,000 + $180,000 + $70,000 + $160,000 = $550,000

Unit product cost = Total manufacturing cost / Total units produced 
= $550,000 / 8,000 units 
= $68.75 per unit

Rounding this to the nearest cent, we get $68.74, which is closest to option C) $64.60. Therefore, the best choice is C.

Comet Canisters, Inc What Is the Unit Product Cost Using Absorption Costing? (Round