Question

Mentor Corp. has provided the following information for the current year:

Units produced 3,500 units
Sale price $200 per unit
Direct materials $70 per unit
Direct labor $55 per unit
Variable manufacturing overhead $20 per unit
Fixed manufacturing overhead $350,000 per year
Variable selling and administrative costs $30 per unit
Fixed selling and administrative costs $150,000 per year

Calculate the unit product cost using absorption costing.

Answer 1

Answer:

$245 per unit

Explanation:

The computation of the unit product cost under absorption costing is shown below:

= Direct material per unit + Direct labor per unit + variable manufacturing overhead per unit + fixed manufacturing overhead per unit

= $70 per unit + $55 per unit + $20 per unit + $100 per unit

= $245 per unit

The fixed manufacturing overhead per unit is

= Fixed manufacturing overhead ÷ units produced

= $350,000 ÷ 3,500 units

= $100