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G Corporation produced 10,000 units of Product A during the month of November
G Corporation produced 10,000 units of Product A during the month of November. Costs during the month were as follows:
Total Cost Direct Materials P20,000
Direct Labor 16,000
Variable Factory Overhead 8,000
Fixed Factory Overhead 10,000
Variable selling & Admin Expenses 2,400
Fixed Selling and Admin Expenses 9,000
Under absorption costing, how much is the product cost per unit?
Expert Solution
Computation of the product cost per unit using absorption costing method:-
Total cost = Direct materials + Direct labor + Variable factory overhead + Fixed factory overhead
= 20,000 + 16,000 + 8,000 + 10,000
= 54,000
Product cost per unit = Total cost / Number of units produced
= 54,000 / 10,000
= 5.40 per unit
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