Sea company reports the following information regarding its production costs:

units produced 46,000 units
direct labor $39 per unit
direct materials $32 per unit
variable overhead $21 per unit
fixed overhead $115,000 in total

compute the product cost per unit under absorption costing.
(a) $32.00
(b) $94.50
(c) $92.00
(d) $71.00
(e) $39.00

correct option is (B) $94.50

Explanation:

given data  

Units produced =  46,000 units

Direct labor = $39 per unit

Direct materials =  $32 per unit

Variable overhead =  $21 per unit

Fixed overhead =  $115,000

to find out

product cost per unit under absorption costing

solution

we find Fixed overhead that is

fixed overhead =

fixed overhead = 2.5

so

total cost that is

total cost = Direct labor + Direct materials + Variable overhead + Fixed overhead

product cost = $39 + $32 + $21 + $2.5

product cost = $94.50

so correct option is (B) $94.50

answer; the above statement/question is ( true);

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