2. What is the inventoriable cost per unit using absorption costing?

ACCOUNTING

Multiple Choice

Gabe’s Auto produces and sells an auto part for $30.00 per unit. In 20x1, 100,000 parts were produced and 75,000 units were sold. Other information for the year includes:



Direct materials $12.00 per unit

Direct manufacturing labor $ 2.25 per unit

Variable manufacturing costs $ 0.75 per unit

Sales commissions $ 3.00 per part

Fixed manufacturing costs $375,000 per year

Administrative expenses, all fixed $135,000 per year



What is the inventoriable cost per unit using absorption costing?

a. $15.00

b. $18.00

c. $18.75

d. $21.75

Click here for the SOLUTION