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Fast Track Auto produces and sells an auto part for $85 per unit. In 2017, 110,000 parts were produced and 90,000 units were sold. Other information for the year includes: Direct materials $23 per unit Direct manufacturing labor $6 per unit Variable manufacturing costs $1 per unit Sales commissions $6 per part Fixed manufacturing costs $790,000 per year Administrative expenses, all fixed $310,000 per year What is the inventoriable cost per unit using absorption costing

Respuesta :

Answer:

$7.18

Explanation:

The computation of the inventoriable cost per unit using absorption costing is shown below:

= Direct material per unit + direct labor per unit + variable manufacturing cost per unit + fixed manufacturing cost per unit

= $23 + $6 + $1 + $7.18 per unit

= $37.18 per unit

The fixed manufacturing cost per unit is come from

= Fixed manufacturing cost ÷ number of parts produced

= $790,000 ÷ 110,000 parts

= $7.18

We simply added the all above product cost per unit so that the inventoriable cost per unit could come

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