Question

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

Selling price $ 115
Units in beginning inventory 0
Units produced 6,600
Units sold 6,400
Units in ending inventory 200

Variable costs per unit:

Direct materials $ 26
Direct labor $ 46
Variable manufacturing overhead $ 7
Variable selling and administrative expense $ 9
Fixed costs:

Fixed manufacturing overhead $ 105,600
Fixed selling and administrative expense $ 51,200

What is the unit product cost for the month under absorption costing?a. $79 per unitb. $95 per unitc. $104 per unitd. $88 per unit

Answer 1

Answer:

Option "B" is the correct answer to the following question.

Explanation:

Computation of unit product cost for the month (Using absorption costing method.)

Particulars                                      Amount

Direct materials                                 $26

Direct labor                                          $46

Variable manufacturing overhead   $7

Fixed Manufacturing cost

($105,600 / 6,600)                                  $16    

Total Product Cost per unit                  $95