Harris Corporation produces a single product. Last year, Harris manufactured 25,

Question

Harris Corporation produces a single product. Last year, Harris manufactured 25,000 units and sold 20,000 units Production costs for the year were as follows: Sales were $850,000, for the year, variable selling and administrative expenses were $110,000, and fixed selling and administrative expenses were $170,000. There was no beginning inventory. Assume that direct labor is a variable cost. Under absorption costing, the ending inventory for the year would be valued at: (Do not round intermediate calculations.) Aaker Corporation, which has only one product, has provided the following data concerning its most recent month of operations: What is the unit product cost for the month under variable costing?

Explanation / Answer

20. The ending inventory = 5000 units

Cost per unit for manufacuring = Total cost / No. of units manufactured

Fixed manufacturing overhead = $10 per unit

Variable manufacturing overhead $8.4 per unit

Direct labour $4.8 per unit

Direct materials $7.2 per unit

Total cost $30.4 per unit

Cost of ending inventory = 5000*    $30.4 per unit = $152000

21. Unit product cost = 23 + 53 + 17 + 17 = $110 per unit

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