Question

Given the following data, calculate product cost per unit under absorption costing.

Direct labor	$	18	per unit
Direct materials	$	12	per unit
Overhead
Total variable overhead	$	31,000
Total fixed overhead	$	101,000
Expected units to be produced		51,000	units

Multiple Choice

$30.00 per unit

$30.61 per unit

$31.98 per unit

$32.59 per unit

$33.00 per unit

Answer 1

Computation of Unit Product Cost
	Absorption Costing
Direct Meterial	$                         12.00
Direct Labour	$                         18.00
Variable Manufactoring Overhead ($31,000/51,000)	$                            0.61
Fixed Manufactoring Overhead (101,000/51,000)	$                            1.98
Unit Product Cost	$                         32.59

unit product cost under absorption costing = $32.59 per unit