Question 4: Inventory Valuation

Suggested time: 15 minutes

MAP One makes maple syrup in Canada. In 2019 it made 220,000 400gr bottle of syrups and sold 190,000 of them, at an average selling price of $25 per unit. The following additional information relates to Athabasca Auto for 2019:

Direct Materials	$10.00 per unit
Direct manufacturing labour	$2.00 per unit
Variable manufacturing costs	$4.00 per unit
Sales commissions	$3.00 per unit
Fixed manufacturing costs	$750,000 per year
Fixed administrative expenses	$270,000 per year

What is Athabasca Auto manufacturing cost per unit using:

a. Variable costing system (7 marks)

b. Absorption costing system (8 marks)