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25 May, 01:04

If variable manufacturing costs are $16 per unit and total fixed manufacturing costs are $401,500, what is the manufacturing cost per unit if: 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. 25 May, 03:00
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    a. $16

    b. $16

    c. $89

    d. $71

    Explanation:

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

    Absorption Manufacturing Cost per Unit = Direct Materials + Direct Labor + Variable Overheads + Fixed Overheads

    a. 5,500 units are manufactured and the company uses the variable costing

    Unit Cost = Variable Costs per unit

    = $16

    b. 7,300 units are manufactured and the company uses the variable costing concept

    Unit Cost = Variable Costs per unit

    = $16

    c. 5,500 units are manufactured and the company uses the absorption costing

    Unit Cost = Variable Costs + Fixed Costs per unit

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

    = $16+$73

    = $89

    d. 7,300 units are manufactured and the company uses the absorption costing

    Unit Cost = Variable Costs + Fixed Costs per unit

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

    = $16+$55

    = $71
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