Gangwer Corporation produces a single product and has the following cost structu

Question

Gangwer Corporation produces a single product and has the following cost structure:

Number of units produced each year ----------- 6,000

Variable cost per unit:

   Direct material ---------------------------------- $43

   Direct labor --------------------------------------$13

   Variable manufacturing overhead ------------------- $5

   Variable selling and administrative expense ----- $1

Fixed costs per year:

   Fixed manufacturing overhead ----------------------- $204,000

   Fixed selling and administrative expense ----------$138,000

The absorption costing unit product cost is:

$95

$119

$61

$56

$95

$119

$61

$56

Explanation / Answer

Direct material 43 Direct labor 13 Variable manufacturing overhead 5 Fixed manufacturing overhead 34 =204000/6000 Absorption costing unit product cost 95 Option A is correct

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