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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Answer:

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