Jarvinen Company, which has only one product, has provided the following data concerning its most recent month of operations: The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month.
-What is the unit product cost for the month under absorption costing?
A)$91
B)$87
C)$62
D)$58

Question

Jarvinen Company, which has only one product, has provided the following data concerning its most recent month of operations: The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month.
-What is the unit product cost for the month under absorption costing?
A)$91 
B)$87 
C)$62 
D)$58

Quizplus · Accepted Answer

The unit product cost under absorption costing is calculated as follows:
Direct materials per unit + Direct labor per unit + Variable manufacturing overhead per unit + Fixed manufacturing overhead per unit
= $15 + $12 + $20 + ($240,000 ÷ 40,000 units)
= $15 + $12 + $20 + $6
= $53
Therefore, the unit product cost for the month under absorption costing is $87 ($53 + $34).

Jarvinen Company, Which Has Only One Product, Has Provided the Following