1. compute the companyrsquos total production cost per unit, Ask an Expert

Accounting

Under absorption costing, a company had the following per unit costs when 10,000 units were produced.

Direct labor………………………………. $2
Direct material…………………………… 3
Variable overhead………………………... 4
Total variable cost………………………... 9
Fixed overhead ($50,000/10,000 units)….. 5
Total production cost per unit………….. $14

1. Compute the company’s total production cost per unit if 25,000 units had been produced.

2. Why might a manager of a company using absorption costing produce more units than can currently be sold?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M958742

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