Emerald Pools,Inc What Is the Unit Product Cost Using Absorption Costing? (Round

question 15

Multiple Choice

Emerald Pools,Inc.has provided the following information for the year. $$\begin{array} { | l | l | l | } \hline \text { Units produced } & 14,000 & \text { units } \\\hline \text { Sales price } & \$ 400 & \text { per unit } \\\hline \text { Direct materials } & \$ 45 & \text { per unit } \\\hline \text { Direct labor } & \$ 20 & \text { per unit } \\\hline \text { Variable manufacturing overhead } & \$ 65 & \text { per unit } \\\hline \text { Fixed manufacturing overhead } & \$ 500,000 & \text { per year } \\\hline \text { Variable selling and administration costs } & \$ 85 & \text { per unit } \\\hline \text { Fixed selling and administration costs } & \$ 270,000 & \text { per year } \\\hline\end{array}$$ What is the unit product cost using absorption costing? (Round any intermediate calculations and your final answer to the nearest dollar.)

• A) $65
• B) $166
• C) $150
• D) $130

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Definitions:

Temporary Differences

Differences between taxable income and accounting income, due to items being recognized in different periods for tax and accounting purposes.

Taxable Income

The amount of income used to calculate how much tax an individual or a company owes to the government in a given tax year.

Pretax Financial Income

Income of a company before taxes are deducted, as reported in its financial statements.

Deferred Tax Liability

A tax obligation due in the future for income that has been recognized in the financial statements but not for tax purposes.