Triple M Company Had the Following Data for the Month

question 12

Multiple Choice

Triple M Company had the following data for the month:
Fixed overhead is $4,000 per month, which is applied to production on the basis of normal activity of 2,000 units. During the month, 2,000 units were produced. Loring started the month with 300 units in beginning inventory, with unit product cost equal to this month's unit product cost. A total of 2,100 units were sold during the month at price of $14 per unit. Selling and administrative expense for the month, all fixed, totalled $3,600.
$\begin{array}{lr}\text { Variable costs per unit: } & \\\text { Direct materials } & \$ 4.00 \\\text { Direct labour } & 3.20 \\\text { Variable overhead } & 1.00 \\\text { Variable selling expenses } & 0.40\end{array}$
-Refer to the Figure.What is the unit product cost under absorption costing?

• A)$7.20
• B)$8.20
• C)$8.60
• D)$10.20

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Definitions:

Carrying Inventory

The process of holding stock or goods in storage or in transit, with associated costs.

Terms of Sale

The conditions under which a seller will complete a sale, typically specifying the time and method of payment and when the buyer takes possession of the goods.

Credit Period

The duration of time a buyer is given by a seller to pay for a purchase.

Cash Discount

An incentive offered by sellers to encourage buyers to pay their invoice ahead of the due date.