Marie\'s Decorating produces and sells a mantel clock for $100per unit. In 2010,

Question

Marie's Decorating produces and sells a mantel clock for $100per unit. In 2010, 100,000 clocks were produced and 80,000 weresold. Other information for the year includes:

            Directmaterials          $30.00 per unit

           Direct manufacturing labor     $ 2.00 perunit

           Variable manufacturing costs $ 3.00 per unit

           Sales commissions       $ 5.00per part

           Fixed manufacturing costs      $25.00 perunit

           Administrative expenses, all fixed     $15.00 per unit

What is the inventoriable cost per unit using variablecosting?  

What is the inventoriable cost per unit using absorptioncosting?  

Explanation / Answer

What is the inventoriable cost per unit using variablecosting?
$40.00 (DM $30.00 +DL $2.00 + Variable manuf. cost $3.00 + Sales commissions$5.00) What is the inventoriable cost per unit using absorptioncosting? Total Variable cost + Fixed costs = $40.00 + $25.00 +$15.00   =   $80.00

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