Given the Following Data, Calculate Product Cost Per Unit Under

question 136

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

---

Definitions:

Price Risk

The risk of a change in the market price of securities affecting an investor's portfolio value.

Bushels

A unit of volume that is used in the United States for measuring agricultural commodities, such as grains.

Payoff Profile

The graphical representation of the potential financial outcomes of an investment or trade at various prices of the underlying asset.

Financial Asset

Any asset that is cash, an equity instrument of another entity, a contractual right to receive cash or another financial asset, or a contractual right to exchange financial instruments under favorable conditions.