A manufacturing company has provided the following data concerning its most recent month of operations
A manufacturing company has provided the following data concerning its most recent month of operations:
What is the unit product cost for the month under absorption costing

A)£124
B)£132
C)£113
D)£143

Question

A manufacturing company has provided the following data concerning its most recent month of operations
A manufacturing company has provided the following data concerning its most recent month of operations:
What is the unit product cost for the month under absorption costing

A)£124 
B)£132 
C)£113 
D)£143

Quizplus · Accepted Answer

To calculate the unit product cost under absorption costing, we need to include both variable and fixed manufacturing overhead costs in the cost of goods sold.

Therefore, the calculation would be:

Direct materials per unit + Direct labor per unit + Variable manufacturing overhead per unit + (Fixed manufacturing overhead / Total number of units produced)

£40 + £30 + £20 + (£12,000 / 800) = £132

Therefore, the unit product cost for the month under absorption costing is £132.

A Manufacturing Company Has Provided the Following Data Concerning Its