arvix Corporation, which has only one product, has provided the following data c

Question

arvix Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month.

What is the unit product cost for the month under absorption costing?

$81 per unit

$90 per unit

$74 per unit

$83 per unit

Selling price $111 Units in beginning inventory 400 Units produced 8,800 Units sold 8,900 Units in ending inventory 300 Variable costs per unit: Direct materials $34 Direct labor $37 Variable manufacturing overhead $3 Variable selling and administrative $9 Fixed costs: Fixed manufacturing overhead $61,600 Fixed selling and administrative $169,100

Explanation / Answer

Unit product cost under absorption costing :

so answer is a) $81 per unit

Direct material 34 Direct labour 37 Variable manufacturing overhead 3 Fixed manufacturing overhead (61600/8800) 7 Total unit product cost 81

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