Under Absorption Costing, the Unit Product Cost Would Be

question 76

Multiple Choice

Under absorption costing, the unit product cost would be:

• A)$20 per unit
• B)$12 per unit
• C)$13 per unit
• D)$8 per unit

---

Definitions:

Total Contribution Margin

This refers to the total amount of revenue left over after deducting all variable costs, indicating the total contribution towards covering fixed costs and generating profit.

Break-even Point

The point at which total revenue equals total costs, resulting in no profit or loss for the business.

Sales Mix

The combination of different products or services that a company sells, which impacts the overall profitability.

Contribution Margin Ratio

A ratio that measures the percentage of sales revenue available to cover fixed expenses and generate profit, calculated as the contribution margin divided by sales revenue.