Mcgougan Corporation produces a single product and has the following cost structure:
-The unit product cost under absorption costing is:
A) $126
B) $158
C) $139
D) $121

Question

Mcgougan Corporation produces a single product and has the following cost structure: 
-The unit product cost under absorption costing is:
A) $126 
B) $158 
C) $139 
D) $121

Quizplus · Accepted Answer

The unit product cost under absorption costing can be calculated as follows:
Direct materials per unit = $16
Direct labor per unit = $22
Variable overhead per unit = $9
Fixed overhead per unit = ($240,000 ÷ 15,000 units) = $16
Total cost per unit = $16 + $22 + $9 + $16 = $63
Therefore, the unit product cost under absorption costing is $63 + ($36,000 ÷ 15,000 units) = $139 per unit.

Mcgougan Corporation Produces a Single Product and Has the Following