Shore Company Reports the Following Information Regarding Its Production Cost

question 141

Multiple Choice

Shore Company reports the following information regarding its production cost.
$$\begin{array} { l l } \text { Units produced } & 28,000 \text { units } \\\text { Direct labor } & \$ 23 \text { per unit } \\\text { Direct materials } & \$ 24 \text { per unit } \\\text { Variable overhead } & \$ 280,000 \text { in total } \\\text { Fixed overhead } & \$ 94,920 \text { in total }\end{array}$$
Compute production cost per unit under absorption costing.

• A) $57.00
• B) $60.39
• C) $47.00
• D) $23.00
• E) $24.00

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Definitions:

Total Revenues

The total amount of money received by a company from its sales of goods or services before any expenses are subtracted.

Variable Costs

Costs that vary directly with the level of production or sales, like raw materials and labor.

Economic Profit

The financial gain that exceeds both the total opportunity costs of production and the accounting costs, reflecting the additional value created from business activities.

Accounting Profit

The profit a company has after deducting all its expenses from its total revenue.