Affinity Makes a Single Product, Pool Pumps How Much Is the Full Cost Per Unit of Inventory

question 54

Multiple Choice

Affinity makes a single product, pool pumps. Information for 2014 appears below (Assume the same unit costs in all years) : $$\begin{array} { l r } \text { Sales in units } & 5,800 \\\text { Production in units } & 6,200 \\\text { Beginning inventory } & 1,500 \\\text { Variable production cost per unit } & \$ 46.00 \\\text { Variable selling cost per unit } & \$ 6.00 \\\text { Fixed production cost per year } & \$ 31,000 \\\text { Fixed selling and administrative cost per year } & \$ 24,000 \\\text { Selling price per unit } & \$ 75.00\end{array}$$ How much is the full cost per unit of inventory?

• A) $46.00
• B) $51.00
• C) $57.00
• D) $52.00

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Definitions:

Present Discounted Value

The value of a future amount of money in today's terms, accounting for the time value of money through discounting.

Formula

A mathematical relationship or rule expressed in symbols, often used to solve problems or to define scientific laws and principles.

Market Value

The existing rate at which a service or asset might be sold or acquired in the market.

Interest Rate

The share of a loan attributed as interest to the borrower, commonly expressed as an annual rate of the outstanding loan amount.