Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Gardner Company produces plastic that is used for injection-
molding applications such as gears for small motors. In 2013,
the first year of operations, Gardner produced 4,000 tons of
plastic and sold 2,500 tons. In 2014, the company produced the
same amount of plastic and sales were 5,500 (the company sold
all of its inventory). In each year, the selling price per ton was
$2,000, variable manufacturing costs were $400, and variable
selling expenses were $600 for each ton of plastic sold. Fixed
manufacturing costs were $2,000,000, and fixed administrative
expenses were $500,000.
What is the unit manufacturing cost under absorption costing
in year 2013?
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Transcribed Image Text:Gardner Company produces plastic that is used for injection- molding applications such as gears for small motors. In 2013, the first year of operations, Gardner produced 4,000 tons of plastic and sold 2,500 tons. In 2014, the company produced the same amount of plastic and sales were 5,500 (the company sold all of its inventory). In each year, the selling price per ton was $2,000, variable manufacturing costs were $400, and variable selling expenses were $600 for each ton of plastic sold. Fixed manufacturing costs were $2,000,000, and fixed administrative expenses were $500,000. What is the unit manufacturing cost under absorption costing in year 2013?
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