Question

Olds Inc., which produces a single product, has provided the following data for its most recent month of operations: 5,900 $66 $60 Number of units produced Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs Fixed manufacturing overhead Fixed selling and administrative expense $7 $15 $200,600 $454,300 There were no beginning or ending inventories. The absorption costing unit product cost was O $126 per unit $167 per unit $133 per unit $259 per unit O O

Answer 1

ANSWER: $ 167 per unit Explanations: The Absorption costing unit product cost = Direct material + Direct Labor +Variable manufacturing overheads + Fixed manufacturing overheads Fixed manufacturing overhead per unit = $ 200,600 / 5,900 units = $ 34 per unit so, Absorption costing unit product cost = $ 66 + $ 60 + $ 7+$ 34 = $ 167 per unit