Using the information below, the product cost per unit under absorption costing

Question

Using the information below, the product cost per unit under absorption costing is:

Units produced

1,000

Variable Costs

Direct materials

$8 per unit

Direct labor

$7 per unit

Variable overhead

$6 per unit

Variable selling and administrative

$2.00 per unit

Fixed overhead

$4,000

Fixed selling and administrative

$1,000

A. $25

B. $10

C. $15

D. $20

Units produced

1,000

Variable Costs

Direct materials

$8 per unit

Direct labor

$7 per unit

Variable overhead

$6 per unit

Variable selling and administrative

$2.00 per unit

Fixed overhead

$4,000

Fixed selling and administrative

$1,000

Explanation / Answer

the product cost per unit under absorption costing=8+7+6+4,000/1,000=$25 per unit

Variable selling and administrative and Fixed selling and administrative should not considered under product cost.

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