Roma Corporation has computed the following unit costs for the year just ended:

Question

Roma Corporation has computed the following unit costs for the year just ended:

Under absorption costing, the per-unit cost of the company's inventory would be carried at:

$103.

$70.

$46.

None of these.

$52.

Under variable costing, the per-unit cost of the company's inventory would be carried at:

$103.

$70.

$46.

None of these.

  Direct material used $8      Direct labor 17      Variable manufacturing overhead 21      Fixed manufacturing overhead 24      Variable selling and administrative cost 6      Fixed selling and administrative cost 27   

Explanation / Answer

Calculate unit product cost :

a) So answer is b) $70

b) So answer is c) $46

Absorption Variable Direct material 8 8 Direct labour 17 17 Variable manufacturing overhead 21 21 Fixed manufacturing overhead 24 Total 70 46

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