Question

Diego Company manufactures one product that is sold for $78 per unit in two geographic regions--the East and West regions. The following information pertains to the company's first year of operations in which it produced 49,000 units and sold 44,000 units. Variable costs per units Manufacturing: Direttorial Direst labor Variable manufacturing overhead Variable selling and administrative Pixed costs per year: Tixed manufacturing overhead Fixed selling and administrative expense The company sold 32,000 units in the East region and 12,000 units in the West region. It determined that $230,000 of its fixed selling and administrative expense is traceable to the West region, $180,000 is traceable to the East region, and the remaining $100,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of its only product. 2. What is the unit product cost under absorption costing? Unit product cost < Prev 234 - 15 of 17 Next > OPPOB EU A OS MacBook Pro ASDFGHJKI command option command

Answer 1

Unit product cost = $60

Working

Absorption costing unit product cost
Direct material	$                   28
Direct labor	$                   14
Variable Manufacturing overhead	$                     4
Fixed manufacturing overhead (686000/49000)	$                   14
Absorption costing Unit Product Cost	$                   60

.In absorption costing all the manufacturing cost are added to product cost. Fixed manufacturing cost is distributed to total units produced.