Foggs Corporation has provided the following data for its two most recent years of operation: The unit product cost under absorption costing in Year 2 is closest to:

A) $40.00
B) $21.00
C) $67.00
D) $61.00

Question

Foggs Corporation has provided the following data for its two most recent years of operation:

The unit product cost under absorption costing in Year 2 is closest to:

A) $40.00
B) $21.00
C) $67.00
D) $61.00

Destiny Marie · Accepted Answer

Final Answer : D, Explanation :  Using the absorption costing method, the unit product cost for Year 2 can be calculated as follows:Direct materials per unit = $20Direct labor per unit = $12Variable manufacturing overhead per unit = $3Fixed manufacturing overhead per unit = $26,000/10,000 = $2.60Total unit product cost = $20 + $12 + $3 + $2.60 = $37.60Adding in the per-unit amount for selling and administrative expenses of $23, the total unit product cost under absorption costing for Year 2 is:$37.60 + $23 = $60.60, which is closest to option D: $61.00.

Foggs Corporation has provided the following data for its two most recent years of operation: The unit product cost under absorption costing in Year 2 is closest to:

A) $40.00
B) $21.00
C) $67.00
D) $61.00

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Learning Objectives

Related questions

Foggs Corporation has provided the following data for its two most recent years of operation: The unit product cost under absorption costing in Year 2 is closest to:A) $40.00B) $21.00C) $67.00D) $61.00

Definitions

Learning Objectives

Learning Objectives

Related questions

Foggs Corporation has provided the following data for its two most recent years of operation: The unit product cost under absorption costing in Year 2 is closest to:

A) $40.00
B) $21.00
C) $67.00
D) $61.00