Galino Company, which has only one product, has provided the following data concerning its most recent...

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Galino Company, which has only one product, has provided the following data concerning its most recent month of operations: U The unit product cost under absorption costing was: A. $91 B. $72 C. $25 D. $32

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Under absorption costing all manufacturing costs both fixed and variable are charged to product costs

1. Gross margin - B.$18,200.

Computation of Gross margin
Sales Value = 2600 units *$99	$2,57,400.00
Less:Cost of production (2600 units *$80)	-$2,08,000.00
Less :selling and administration expense (2600 units *$7 + $13,000)	-$31,200.00
Total gross margin	$18,200.00

Cos per unit of inventory = Total cost of production including Fixed manufacuring Overhead/Number of units produced
Cost of production =(2900 units * ($27+$11+$6))+$104,400	$2,32,000.00
Number units produced	2900 units
Cost per unit of Inventory	$80.00

2. A. $91

Units product cost = Total cost/ Units produced

Total cost = 2900*($27+$11+$6+$7) + $104,400+$13,000 = $265,300

units produced = 2900 units

Units product cost = $265,300/2900units = $91.48

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