Question

Ayers, Inc. has the following cost data for Product X (Click on the icon to view the data) Calculate the unit product cost using absorption costing and variable costing when production is 600 units, 1,000 units, and 1.200 units Select the labels and enter the amounts to compute the unit product cost using absorption costing (if a box is not used in the table, leave the box empty, do not select a label or enter a zero) 600 units 1,000 units 1,200 units Total unit product cost Select the labels and enter the amounts to compute the unit product cost using vanable costing (If a box is not used in the table, leave the box empty, do not selecta label or enter a zero) 600 units 1000 units 1200 units Choose from any list or enter any number in the input fields and then continue to the next question 1224 AM Mrr

Answer 1

PART-1: Under absorption costing, all product costs including direct materials, direct labor, variable mfg. overhead and fixed mfg. overhead costs are considered as product costs. Therefore, 600 $43 Production volume Direct Materials Direct Labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost $51 $13 $20 $127 1,000 $43 $51 $13 $12 $119 1,200 $43 $51 $13 $10 $117 [Ref: NOTE] NOTE: Unit fixed manufacturing overhead at 600 units = $12,000 / 600 = $20; At $12,000 / 1,000 = $12; At $12,000 / 1,200 = $10.

PART-2: Under variable costing, variable product costs including direct materials, direct labor & variable mfg. overhead costs are considered as product costs. Therefore, Production volume Direct Materials Direct Labor Variable manufacturing overhead Unit product cost 600 $43 $51 $13 $107 1,000 $43 $51 $13 $107 1,200 $43 $51 $13 $107