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Q2SE

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Horngren'S Financial And Managerial Accounting
Found in: Page 1167

Short Answer

Computing unit product cost, absorption costing Calculate the unit product cost using absorption costing. Round your answer to the nearest cent.

Use the following information for Short Exercises S21-2 and S21-3.

Martin Company had the following costs:

Units produced 320 units Direct materials $ 71 per unit Direct labor 40 per unit Variable manufacturing overhead 13 per unit Fixed manufacturing overhead 7,360 per year Variable selling and administrative costs 22 per unit

Fixed selling and administrative costs 1,920 per year

Answer

The total unit product cost is $147.

See the step by step solution

Step by Step Solution

Step 1: Calculation of fixed manufacturing overhead

Fixed manufacturing overhead = Total fixed manufacturing overhead / No. of units produced

=$7,360/320

=$23

Step 2: Calculation of unit product cost

Particulars

Amount

Direct material

$71

Direct labor

$40

Variable manufacturing overhead

$13

Fixed manufacturing overhead

$23

Total unit product cost

$147

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