Faxon Company, which has only one product, 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) $99
B) $131
C) $122
D) $108

Question

Faxon Company, which has only one product, 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) $99 
B) $131 
C) $122 
D) $108

Quizplus · Accepted Answer

Using absorption costing method, we need to calculate the total manufacturing cost per unit first:
Direct materials + Direct labor + Manufacturing overhead = Total manufacturing cost per unit 
$56 + $28 + ($85,825 ÷ 7,900) = $122
Therefore, the unit product cost for the month under absorption costing is $122.

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