2018SU-ACCT-2302-21298 (1) Test: Exam chapter 20 to 22 This Question: 2 pts Last

Question

2018SU-ACCT-2302-21298 (1) Test: Exam chapter 20 to 22 This Question: 2 pts Last year, Adara Company produced 15,000 units and sold 13,000 units. The company had no beginning inventory. They incurred the folowing costs Direct materials per unit Direct labor per unit $14 $11 S7 Variable overhead per unit Total fixed manufacturing $135,000 Total selling and administrative Adara's product cost per unit under absorption costing is O A. $32 O B. $41 O c. $46 O D. $42 Click to select your answer. Type here to search

Explanation / Answer

Consider the given problem here total production is “15,000”. So, the total cost is given by.

=> TC = (14+11+7)*15,000 + 135,000 + 80,000 = 32*15,000 + 215,000 = 695,000.

So, the per unit absorption cost is given by, “TC/Q = 695,000/15,000 = 46.33 = 46.

So, here the correct answer is “C”.

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