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1 November, 18:21

If variable manufacturing costs are $16 per unit and total fixed manufacturing costs are $401,500, what is the manufacturing cost per unit a.$5,500 units are manufactured and the company uses the variable costing concept? b.$7,300 units are manufactured and the company uses the variable costing concept? $ c.$5,500 units are manufactured and the company uses the absorption costing concept? $ d.$7,300 units are manufactured and the company uses the absorption costing concept? $

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  1. 1 November, 18:38
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    a. $16

    b. $16

    c. $89

    d. $71

    Explanation:

    Variable Product Cost per Unit = Direct Labor + Direct Materials + Variable Overheads

    Absoption Product Cost per Unit = Direct Labor + Direct Materials + Variable Overheads + Fixed Overheads

    manufacturing cost per unit

    (a) 5,500 units are manufactured and the company uses the variable costing concept

    manufacturing cost per unit = Variable Costs

    =$16

    (a) 7,300 units are manufactured and the company uses the variable costing concept

    manufacturing cost per unit = Variable Costs

    =$16

    (c) 5,500 units are manufactured and the company uses the absorption costing concept

    manufacturing cost per unit = Variable Costs + Fixed Costs

    =$16 + ($401,500/5,500)

    = $16 + $73

    = $89

    (d) 7,300 units are manufactured and the company uses the absorption costing concept

    manufacturing cost per unit = Variable Costs + Fixed Costs

    =$16 + ($401,500/7,300)

    = $16 + $55

    = $71
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