Lenart Corporation has provided the following data for its two most recent years of operation: The unit product cost under absorption costing in Year 2 is closest to:

A) $39.00
B) $23.00
C) $10.00
D) $33.00

Question

Lenart Corporation has provided the following data for its two most recent years of operation:

The unit product cost under absorption costing in Year 2 is closest to:

A) $39.00
B) $23.00
C) $10.00
D) $33.00

Crystal Aguilar · Accepted Answer

Final Answer : D, Explanation :  The unit product cost under absorption costing can be calculated as follows:Unit Product Cost = (Direct Materials + Direct Labor + Variable Manufacturing Overhead + Fixed Manufacturing Overhead)/Number of Units ProducedYear 1:Unit Product Cost = ($500,000 + $600,000 + $300,000 + $400,000)/50,000 = $36.00Year 2:Unit Product Cost = ($600,000 + $800,000 + $400,000 + $400,000)/40,000 = $50.00Therefore, the unit product cost under absorption costing in Year 2 is closest to $33.00, which is option D.

Lenart Corporation has provided the following data for its two most recent years of operation: The unit product cost under absorption costing in Year 2 is closest to:

A) $39.00
B) $23.00
C) $10.00
D) $33.00

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Learning Objectives

Related questions

Lenart Corporation has provided the following data for its two most recent years of operation: The unit product cost under absorption costing in Year 2 is closest to:A) $39.00B) $23.00C) $10.00D) $33.00

Definitions

Learning Objectives

Learning Objectives

Related questions

Lenart Corporation has provided the following data for its two most recent years of operation: The unit product cost under absorption costing in Year 2 is closest to:

A) $39.00
B) $23.00
C) $10.00
D) $33.00