Ohio Company Provided the Following Information Regarding Its Only Product--Ice

question 115

Multiple Choice

Ohio Company provided the following information regarding its only product--ice skates. $\begin{array}{lr}\text { Direct materials used } & \$ 300,000 \\\text { Direct labor } & 80,000 \\\text { Fixed overhead } & 100,000 \\\text { Fixed selling and administrative costs } & 170,000 \\\text { Variable overhead } & 20,000 \\\text { Variable selling and administrative } & 90,000 \\\text { Selling unit price } & 99 \\\\\text { Units produced and sold } & 12,000\end{array}$ _____ is the total manufacturing cost if the absorption approach is used.

• A)$280,000
• B)$300,000
• C)$360,000
• D)$500,000

---

Definitions:

Traditional Costing Method

A costing system that applies overhead costs to products based on a predetermined overhead rate, without regard to the actual activities that lead to those costs.

Unit Product Cost

The total cost associated with producing a single unit of output, including both variable and fixed costs.

Unit Product Cost

The total cost (direct materials, direct labor, and overhead) associated with producing a single unit of a product.

Traditional Costing Method

A costing methodology that allocates overhead costs based on a single, volume-based cost driver, such as labor hours or machine hours.