We appreciate your visit to Comfy Cozy Chairs makes and sells rockers Each rocker requires 45 of direct materials and 37 of direct labor Variable manufacturing overhead is 8 per. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!
Answer :
Answer:
the unit product cost using absorption costing is $119
Explanation:
The computation of the unit product cost using absorption costing is given below:
= Direct material per unit + direct labor per unit + variable manufacturing cost per unit + fixed manufacturing cost
= $45 + $37 + $8 + ($58,000 ÷ 2000)
= $119
Hence, the unit product cost using absorption costing is $119
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Final answer:
The unit product cost using absorption costing for Comfy Cozy Chairs is $119.
Explanation:
To calculate the unit product cost using
absorption costing
, we need to add together the costs of direct materials, direct labor, variable manufacturing overhead, and a portion of the fixed manufacturing overhead allocated to each unit. In this case, we have: $45 (direct materials) + $37 (direct labor) + $8 (variable manufacturing overhead) = $90 per unit. The fixed manufacturing overhead is $58,000 and since we produced 2,000 rockers, the allocated overhead per unit is $58,000 / 2,000 = $29 per unit. So, the total unit product cost using absorption costing is $90 + $29 =
$119
. The variable selling and administrative costs, and fixed selling and administrative costs do not factor into the unit production cost, which are only considered when we are calculating the product's selling price, as they apply after production.
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