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29 April, 10:54

Adamson, Inc. has the following cost data for Product X: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $ 41 per unit 57 per unit 7 per unit 20,000 per year Learning Objective 2 Calculate the unit product cost using absorption costing and variable costing when production is 2,000 units, 2,500 units, and 5,000 units.

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  1. 29 April, 11:47
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    Answer and Explanation:

    The computation of the unit product cost using absorption costing and variable costing is shown below

    Under absorption costing

    Particulars 2,000 units 2,500 units 5,000 units

    Direct materials per unit $41 $41 $41

    Direct labor per unit $57 $57 $57

    Variable manufacturing

    overhead per unit $7 $7 $7

    Fixed manufacturing

    overhead per unit $10 $8 $4

    ($20,000 : 2,000 units) ($20,000 : 2,500 units) ($20,000 : 5,000 units)

    Unit product cost $115 $113 $109

    Under variable costing

    Particulars 2,000 units 2,500 units 5,000 units

    Direct materials per unit $41 $41 $41

    Direct labor per unit $57 $57 $57

    Variable manufacturing

    overhead per unit $7 $7 $7

    Unit product cost $105 $105 $105
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