Question

Adelphi Company provides the following information for their first year of operations in 2018: Sales, 10,000 units @ $15 each Total production, 12,000 units Production costs per unit: Direct materials $2.00 Direct labor $3.00 Variable overhead $2.00 Fixed manufacturing overhead $12,000 Adelphi Company uses absorption costing. Use this information to determine for Adelphi Company the FY 2018 Cost of Goods Sold. (Round & enter final answer to the nearest whole dollar)

Answer 1

Unit product cost = Direct Materials + Direct Labor + Variable Manufacturing Overhead + Fixed manufacturing overhead per unit

= 2 + 3 + 2 + (12,000/12,000) = 8 per unit

Cost of Goods Sold = 8 per unit * 10,000 units

= $80,000