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24 November, 00:15

The following cost behavior patterns describe anticipated manufacturing costs for 2013: raw material, $7.60/unit; direct labor, $10.60/unit; and manufacturing overhead, $309,600 + $8.60/unit. Required: If anticipated production for 2013 is 36,000 units, calculate the unit cost using variable costing and absorption costing. (Round your answers to 2 decimal places.)

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  1. 24 November, 04:05
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    Answer: The answer is as follows:

    Explanation:

    Given that,

    Raw material = $7.60/unit

    Direct labor = $10.60/unit

    Manufacturing overhead = $8.60/unit

    (1) Unit cost under variable costing = Raw material + Direct labor + variable Manufacturing overhead

    = 7.6 + 10.6 + 8.6

    = 26.8

    (2) Unit cost under absorption costing = Raw material + Direct labor + variable Manufacturing overhead + fixed Manufacturing overhead

    = 7.6 + 10.6 + 8.6 + 8.6

    = 35.4
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