Under Absorption Costing, a Company Had the Following Unit Costs

question 67

Multiple Choice

Under absorption costing, a company had the following unit costs when 8,000 units were produced. $\begin{array}{lr}\text { Direct labor } & \$ 8.50 \text { per unit } \\\text { Direct material } & \$ 9.00 \text { per unit } \\\text { Variable overhead } & \$ 6.75 \text { per unit } \\\text { Fixed overhead }(\$ 60,000 / 8,000 \text { units }) &\underline{ \$ 7.50 \text { per unit }} \\\text { Total production cost } & \underline{\$ 31.75 \text { per unit }}\end{array}$ Compute the total production cost per unit under absorption costing if 30,000 units had been produced.

• A)$31.75
• B)$27.25
• C)$26.25
• D)$24.25
• E)$17.50

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Definitions:

Insurance Premium

The amount of money that an individual or business must pay for an insurance policy, typically charged monthly or annually.

Billing Office

A department within a healthcare facility responsible for processing patient billing and insurance claims.

Direct Care

Personal health care services provided by clinicians, including assessment, diagnosis, treatment, and interactions directly with patients.

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The process of educating a patient about their health condition, treatment options, and self-care practices to promote better health outcomes.