Zeklen Company had the following data for the month:
Fixed overhead is $2,000 per month; it is applied to production based on normal activity of 1,000 units.During the month, 3,000 units were produced.Zeklen started the month with 200 units in beginning inventory, with unit product cost equal to this month's unit product cost.A total of 1,200 units were sold during the month at a price of $10.Selling and administrative expense for the month, all fixed, totaled $2,400.
What is the unit product cost under absorption costing?

A) $7
B) $12
C) $4
D) $10
E) $11

Question

Zeklen Company had the following data for the month: 
 Fixed overhead is $2,000 per month; it is applied to production based on normal activity of 1,000 units.During the month, 3,000 units were produced.Zeklen started the month with 200 units in beginning inventory, with unit product cost equal to this month's unit product cost.A total of 1,200 units were sold during the month at a price of $10.Selling and administrative expense for the month, all fixed, totaled $2,400.
What is the unit product cost under absorption costing?
 
A) $7 
B) $12 
C) $4 
D) $10 
E) $11

Quizplus · Accepted Answer

11ea8a4c_490b_d103_a0e6_23e55913d7b2_TB5550_00 ^*Fixed overhead = Fixed overhead per month ÷ Number of units produced = $2,000 ÷ 1,000 units = $2

Zeklen Company Had the Following Data for the Month