Product cost per unit under absorption: Product cost under absorption costing includes direct material, direct labor, variable overhead , and fixed overhead as per unit. Product cost per unit.

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Chapter 21, Problem 23QS

To determine

Concept Introduction:

Product cost per unit under absorption: Product cost under absorption costing includes direct material, direct labor, variable overhead, and fixed overhead as per unit.

Product cost per unit.

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Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 44,000 units and sold 36,000 units at a price of $140 per unit. Manufacturing costs Direct materials per unit Direct labor per unit Variable overhead per unit Fixed overhead for the year Selling and administrative costs Variable selling and administrative cost per unit Fixed selling and administrative cost per year 60 24 24 $ 528,000 22 8 $4 $ 105,000 11 la. Assume the company uses absorption costing. Determine its product cost per unit. Absorption costing Per unit product cost using:

1. COMPUTE THE UNIT PRODUCT COST UNDER ABSORPTION COSTING 2. COMPUTE THE UNIT PRODUCT COST UNDER VARIABLE COSTING

ABC Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative $ $ $ $ 12 3 1 1 $324,000 $234,000 During the year, the company produced 27,000 units and sold 23,000 units. The selling price of the company's product is $42 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year.