During its first year of operations, connor company paid $50,000 for direct materials and $36,000 in wages for production workers. lease payments and utilities on the production facilities amounted to $14,000. general, selling, and administrative expenses were $16,000. the company produced 5,000 units and sold 4,000 units for $30.00 a unit. the average cost to produce one unit is which of the following amounts?
a. $20.00
b. $16.00
c. $18.40
d. $25.00

The correct answer is A.

Explanation:

ing the following information:

During its first year of operations, Connor Company paid $50,000 for direct materials and $36,000 in wages for production workers. Lease payments and utilities on the production facilities amounted to $14,000. General, selling, and administrative expenses were $16,000. The company produced 5,000 units.

Average cost= (direct material + direct labor + allocated factory overhead)/Q

Average cost= (50,000 + 36,000 + 14,000)/5,000= 20

the answer is a. $209,000

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