PART A GO pts.J Murphy Inc., which produces a single product, has provided the f
ID: 2436620 • Letter: P
Question
PART A GO pts.J Murphy Inc., which produces a single product, has provided the following data for its most recent month of operation: Number of units produced Number of units sold 7,000 6,00 Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead S37 S43 S5 S1 ariable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expenses $119,000 $84,000 The company had no beginning or ending inventories. Reauired: CYou must show your work a. Compute the product cost per unit under variablecosting. (15 pts.) b. Compute the product cost per unit under absorption costing. (15 pts.)Explanation / Answer
a.
Direct materials
$ 37.00
Direct labor
$ 43.00
Variable manufacturing overhead
$ 5.00
Product cost under variable costing
$ 85.00
b.
Direct materials
$ 37.00
Direct labor
$ 43.00
Variable manufacturing overhead
$ 5.00
Fixed manufacturing overhead ($84,000/7,000 units)
$ 12.00
Product cost under absorption costing
$97.00
Direct materials
$ 37.00
Direct labor
$ 43.00
Variable manufacturing overhead
$ 5.00
Product cost under variable costing
$ 85.00
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