Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Under absorption costing, a company had the following unit costs when 10,000 units were produced:
Direct labor $ 2 per unit
Direct material $ 3 per unit
Variable overhead $ 4 per unit
Total variable cost $ 9 per unit
Fixed overhead cost ($50,000/10,000 units) $ 5 per unit
Total production cost $ 14 per unit
The total product cost per unit under absorption costing if 25,000 units had been produced would be $11.
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