Q.1.b)

Fresh Air Products manufactures and sells a variety of camping products. Recently the company opened a new plant to manufacture a deluxe portable cooking unit. Cost and sales data for the first month of operations are shown below: Beginning inventory Units produced Units sold Manufacturing costs 0 units 10,500 8,700 Fixed overhead Variable overhead Direct labour Direct material $84,000 $3 per unit $12 per unit $30 per unit Selling and administrative costs Fixed Variable $197,800 $3 per unit sold The portable cooking unit sells for $110. Management is interested in the opening month's results and has asked for an income statement. Assuming the company uses absorption costing: Your answer is correct. Calculate the manufacturing cost per unit Manufacturing cost 53 per unit