Yoshihara Corporation produces a single product and has the following cost structure:
Number of units produced each year is 4,000. Variable cost per unit for direct materials is $62, direct labor is $71, variable manufacturing overhead is $7 and variable selling and administrative expense is $6. Fixed costs for the year are fixed manufacturing overhead of $228,000 and fixed selling and administrative expense of $96,000.
The absorption costing unit product cost is:
a. $140
Selected: b. $197 This answer is correct.
c. $133
d. $227
Correct! Unit fixed manufacturing overhead is $228,000 divided by 4,000 equals $57. Unit product cost equals $57 plus $62 plus $71 plus $7 totals $197.
overhead of $12 which totals $34.