Yoshihara Corporation produces a single product and has the following cost structure:
The absorption costing unit product cost is:
A) $140
B) $197
C) $133
D) $227

Question

Yoshihara Corporation produces a single product and has the following cost structure: 
The absorption costing unit product cost is:
A) $140 
B) $197 
C) $133 
D) $227

Quizplus · Accepted Answer

The absorption costing unit product cost is calculated as follows:

Direct materials per unit = $40
Direct labor per unit = $32
Variable manufacturing overhead per unit = $24
Fixed manufacturing overhead per unit = ($120,000 ÷ 15,000 units) = $8
Total absorption cost per unit = ($40 + $32 + $24 + $8) = $104

Adding the markup of 90% to the total absorption cost per unit gives us the selling price per unit:

Selling Price per unit = $104 × 1.9 = $197. Therefore, the correct answer is B.

Yoshihara Corporation Produces a Single Product and Has the Following