Fahey Company Manufactures a Single Product That It Sells For $\$ 25$

question 19

Multiple Choice

Fahey Company manufactures a single product that it sells for $\$ 25$ per unit. The company has the following cost structure:
$\begin{array}{|l|r|}\hline \text { Variable costs per unit: } & \\\hline \text { Manufacturing } & \$ 9 \\\hline \text { Selling and administrative } & \$ 3 \\\hline \text { Fixed costs in total } & \\\hline \text { Manufacturing } & \$ 72,000 \\\hline \text { Selling and administrative } & \$ 54,000 \\\hline\end{array}$
There were no units in beginning inventory. During the year, 18,000 units were produced and 15,000 units were sold.
-Under absorption costing,what was the unit product cost?

• A) $9.
• B) $12.
• C) $13.
• D) $16.

---

Definitions:

User Requirements

Specifications or conditions defined by users that a system, product, or service must meet to be considered satisfactory.

Economic Feasibility

Assessment of the financial aspects of a project or system to evaluate whether the projected benefits outweigh the costs, ensuring it is economically viable.

Financial Risk

The possibility of losing money on an investment or business venture.

Project Completion

The final stage in a project where all tasks have been finished and the project objectives have been met.