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Baxtell Company manufactures and sells a single product. The following costs were incurred during the companys first year of operations: Variable costs per unit: Manufacturing:
Baxtell Company manufactures and sells a single product. The following costs were incurred during the companys first year of operations: |
Variable costs per unit: | |||
Manufacturing: | |||
Direct materials | $ | 28 | |
Direct labour | 16 | ||
Variable manufacturing overhead | 6 | ||
Variable selling and administrative | 5 | ||
Fixed costs per year: | |||
Fixed manufacturing overhead | 330,000 | ||
Fixed selling and administrative expense | 201,600 | ||
During the year, the company produced 27,500 units and sold 22,400 units. The selling price of the companys product is $82 per unit. |
Required: |
1. | Assume that the company uses absorption costing. |
|
2. | Assume that the company uses variable costing. |
a. | Compute the unit product cost.
|
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