Union Company Reported the Following Information About the Production and Sale

question 28

Multiple Choice

Union Company reported the following information about the production and sale of its only product during the first month of operations:
$\begin{array}{ll}\text { Selling price per unit } & \$ 225,00 \\\text { Sales } & \$ 315,000 \\\text { Direct materials used } & \$ 160,000 \\\text { Direct labor } & \$ 100,000\\\text { Variable factory overhead } & \$ 60,000 \\\text { Fixed factory overhead } & \$ 80,000 \\\text { Variable selling and administrative expenses } & \$ 20,000 \\\text { Fixed selling and administrative expenses } & \$ 30,000 \\\text { Production volume variance } & 0 \\\text { Ending inventory, Direct Materials } & 0 \\\text { Ending inventory, Work-in-process } & 0\\\text { Ending inventory, Finished Goods }&600 \text { units }\end{array}$
Under absorption costing,what is the product cost per unit?

• A) $130.00
• B) $160.00
• C) $200.00
• D) $225.00

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Definitions:

Interest Rate

The percentage of principal charged by the lender for the use of its money.

Budget Constraint

An economic model that outlines the combination of goods and services a consumer can purchase given their income and the prices of those goods and services.

Consumption

is the act of using goods and services to satisfy needs or desires, often discussed in the context of consumer behavior in economics.

Earnings

The amount of money received by an individual or organization in return for labor or services provided, or from investments.