Lukin Corporation Reports the Following First Year Production Cost Information

question 136

Essay

Lukin Corporation reports the following first year production cost information.
$$\begin{array} { l l } \text { Units produced } & 62,000 \text { units } \\\text { Units sold } & 59,000 \text { units } \\\text { Direct labor } & \$ 41 \text { per unit } \\\text { Direct materials } & \$ 15 \text { per unit } \\\text { Variable overhead } & \$ 9,300,000 \text { in total } \\\text { Fixed overhead } & \$ 4,340,000 \text { in total }\end{array}$$
a.Compute production cost per unit under variable costing.
b.Compute production cost per unit under absorption costing.
c.Determine the cost of ending inventory using variable costing.
d.Determine the cost of ending inventory using absorption costing.

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Definitions:

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the strategic objectives of an organization, such as acquiring new machinery or expanding operations.

Incremental Sales

Additional sales generated by a specific business activity or decision, such as a marketing campaign or product launch.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding direct labor and materials costs.

Incremental Sales

Additional revenues generated from a new marketing campaign, sales strategy, or any activity beyond normal operations.