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Caruso Incorporated, which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 4,000 Variable costs per unit: Direct materials $ 39 Direct labor $ 71 Variable manufacturing overhead $ 5 Variable selling and administrative expense $ 8 Fixed costs: Fixed manufacturing overhead $220,000 Fixed selling and administrative expense $308,000 There were no beginning or ending inventories. The unit product cost under absorption costing was:

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Answer:

"$170 per unit" is the appropriate response.

Explanation:

The given values are:

Number of units produced

= 4,000

Direct material

= $39

Direct labor

= $71

Variable manufacturing overhead

= $5

Now,

The fixed manufacturing overhead will be:

=  [tex]\frac{220,000}{Units \ produced}[/tex]

=  [tex]\frac{220,000}{4000}[/tex]

=  [tex]55 \ per \ unit[/tex] ($)

Hence,

The unit product cost under absorption costing will be:

=  [tex]Direct \ materials + Direct \ labor + Variable \ manufacturing \ overhead + Fixed \ manufacturing[/tex]On substituting the above values, we get

=  [tex]39+71+5+55[/tex]

=  [tex]170 \ per \ unit[/tex] ($)

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