a) Obama Company sells its product for $28 per unit. During 2020, it produced 27500 units and sold 11000 units (there was no beginning inventory). Costs per unit are: direct materials $6, direct labour $5, and variable overhead $4. Fixed costs are: $412500 manufacturing overhead, and $110000 selling and administrative expenses. The per-unit manufacturing cost under absorption costing is

$15.00.

$30.00.

$34.00.

$52.50.

b) Obama Company sells its product for $25 per unit. During 2020, it produced 27500 units and sold 15000 units (there was no beginning inventory). Costs per unit are: direct materials $5, direct labour $4, and variable overhead $3. Fixed costs are: $412500 manufacturing overhead, and $96250 selling and administrative expenses. The per-unit manufacturing cost under variable costing is

$12.00.

$27.00.

$30.50.

$39.50.