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4 October, 21:06

Barkley Company had the followign cost data for Product X. Direct Materials $45 per unit Direct Labor 50 per unit Variable manufacturing overhead 10 per unit Fixed manufacturing overhead 30,000 per year Calculate the unit product cost using absorption costing and variable costing when production is 3,000 units.

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  1. 4 October, 21:55
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    Variable costing unit cost 105

    Absorption costing units cost 115

    Explanation:

    variable cost:

    DM 45

    DL 50

    VMO 10

    Total variable 105

    Variable cost x 3,000 = 105 x 3,000 = 315,000

    Absorption cost

    variable + fixed = 315,000 + 30,000 = 345,000 / 3
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