Question

QS 19-1 Computing unit cost under absorption costing LO P1 Vijay Company reports the following information regarding its production costs. 10 per unit 20 per unit Direct materials Direct labor Overhead costs for the year Variable overhead Fixed overhead Units produced 10 per unit $160,000 20,000 units Compute its product cost per unit under absorption costing. Product cost per unit

Answer 1

Requirement 19(5) Requirement 19(17) Requirement 19(1) Unit Product cost under absorption costing : Direct material Direct labour Variable manfacturing Overhead Fixed manfacturing Overhead $ 10.000 $ 20.000 $ 10.000 $ 8.00 Cost of goods sold Direct material per unit Direct labour per unit Variable manfacturing Overhead per unit Fixed manfacturing Overhead per unit Production Volume 20,000 Units 10.00 12.00 $ 3.00 2.00 Direct material Direct labour Variable manfacturing Overhead Fixed manfacturing Overhead $50.000 $ 12.000 $ 6.000 $ 2.00 $70.000 $ 28.00 $ 98.00 Product Cost per Unit $ 48.00 Add : Target markup @40% Target selling price Cost of goods sold per unit Number of units sold Total Cost of goods sold 27.00 20000 5,40,000.00 $ Requirement 19(2) Unit Product cost under Variable costing : Direct material Direct labour Variable manfacturing Overhead $ $ $ 10.00 20.00 10.00 Product Cost per Unit $ 40.000 Ramort Company Income Statement (partial) Sales Volume 20,000 Units Sales Revenue $ 12,00,000.00 Cost of goods sold $ 5,40,000.00 Gross Margin 6,60,000.00