Vancott Inc, which produces a single product, has provided the following data fo

Question

Vancott Inc, which produces a single product, has provided the following data for its most recent month of operation: Number of units produced Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expenses s 93 $ 58 nse Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expenses $348, aee The company had no beginning or ending inventories Required: Compute the unit product cost under absorption costing. Show your work

Explanation / Answer

Selling and administrative expenses (both variable and fixed) are not relevant for the computation of unit product cost.

Computation of Unit Product Cost Absorption Costing Direct Meterial $                                  93 Direct Labour $                                  58 Variable Manufactoring Overhead $                                    1 Fixed Manufactoring Overhead ($192,000/6,000) $                                  32 Unit Product Cost $                                184

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