Triton Industries Reports the Following Information Regarding Its Production Cost

question 43

Essay

Triton Industries reports the following information regarding its production cost:
$\begin{array}{ll}\text { Units produced } & 77,000 \text { units } \\\text { Direct labor } & \$ 27 \text { per unit } \\\text { Direct materials } & \$ 12 \text { per unit } \\\text { Variable overhead } & \$ 2,541,000 \text { in total } \\\text { Fixed overhead } & \$ 3,311,000 \text { in total }\end{array}$

a.Compute production cost per unit under variable costing.
b.Compute production cost per unit under absorption costing.

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Definitions:

Traditional Costing System

A cost accounting method that assigns overhead costs to products based on a predetermined overhead rate and actual levels of a cost driver.

Overhead Cost

Indirect expenses related to the general operation of a business, such as rent, utilities, and administrative salaries, not directly tied to any specific product or service.

Direct Labor-Hours

The total hours worked by employees who are directly involved in the production process, often used to allocate manufacturing overhead.

Activity-Based Costing

A costing method that allocates overhead costs to products based on the activities required to produce them.