Baraban Corporation has provided the following data for its most recent year of

Question

Baraban Corporation has provided the following data for its most recent year of operation: Selling price per unit $ 47 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $ 10 Direct labor $ 6 Variable manufacturing overhead $ 5 Fixed manufacturing overhead per year $ 130,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $ 5 Fixed selling and administrative expense per year $ 63,000 Units in beginning inventory 0 Units produced during the year 10,000 Units sold during the year 9,000 Units in ending inventory 1,000 The unit product cost under absorption costing is closest to: Multiple Choice $13.00 $34.00 $39.00 $21.00

Explanation / Answer

Fixed manufacturing overhead /unit=($130,000/10000)=$13/unit

Hence  unit product cost under absorption costing=direct material+direct labor+variable overhead+Fixed overhead

which is equal to

=(10+6+5+13)

which is equal to

=$34 per unit.

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