Answer the Following Questions Using the Information Below:
Leongatha Motors

question 217

Multiple Choice

Answer the following questions using the information below:
Leongatha Motors produces and sells an auto part for $30.00 per unit.In 2018,100 000 parts were produced and 75 000 units were sold.Other information for the year includes:
$\begin{array}{lc}\text { Direct materials } & \$ 12.00 \text { per unit } \\\text { Direct manufacturing labour } & \$ 2.25 \text { per unit } \\\text { Variable manufacturing costs } & \$ 0.75 \text { per urit } \\\text { Sales commissions } & \$ 3.00 \text { per part } \\\text { Fixed manufacturing costs } & \$ 375000 \text { per year } \\\text { Administrative expenses, all fixed } & \$ 135000 \text { per year }\end{array}$
-What is the inventoriable cost per unit using absorption costing?

• A)$15.00
• B)$18.00
• C)$18.75
• D)$21.75

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Definitions:

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Individuals or entities that form an agreement to control prices and limit competition within a market.