Given the Following Data,calculate Product Cost Per Unit Under Absorption

question 114

Multiple Choice

Given the following data,calculate product cost per unit under absorption costing.
$\begin{array}{|l|c|}\hline \text { Direct labor } & \$ 7 \text { per unit } \\\hline \text { Direct materials } & \$ 1 \text { per unit } \\\hline \text { Overhead } & \\\hline \text { Total variable overhead } & \$ 20,000 \\\hline \text { Total fixed overhead } & \$ 90,000 \\\hline & \\\hline \text { Expected units to be produced } & 40,000 \text { units } \\\hline\end{array}$

• A) $8 per unit
• B) $8.50 per unit
• C) $10.25 per unit
• D) $10.75 per unit
• E) $12 per unit

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Definitions:

Depreciation Expense

Depreciation Expense represents the systematic allocation of the cost of a tangible asset over its useful life, reflecting its wear and tear or obsolescence.

Contra-Asset

A contra-asset account is an asset account where the balance of the account is either zero or a credit balance, used to reduce the value of the related asset, such as accumulated depreciation for fixed assets.

Accumulated Depreciation

The total amount of a company's asset that has been expensed for depreciation to date.

Accrued Expense

An expense that has been incurred but has not yet been paid or recorded in financial statements through standard accounting entries.