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Murphy Inc., which produces a single product, has provided the following data for its most recent month of operation: Number of units produced 7,000 Variable
Murphy Inc., which produces a single product, has provided the following data for its most recent month of operation:
Number of units produced | 7,000 | |
Variable costs per unit: | ||
Direct materials | $ | 86 |
Direct labor | $ | 71 |
Variable manufacturing overhead | $ | 2 |
Variable selling and administrative expenses | $ | 7 |
Fixed costs: | ||
Fixed manufacturing overhead | $ | 378,000 |
Fixed selling and administrative expenses | $ | 98,000 |
The company had no beginning or ending inventories.
Required:
a. Compute the unit product cost under absorption costing.
b. Compute the unit product cost under variable costing.
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