Hayes inc. provided the following information for the year 2015:

beginning inventory 100 units
units produced 750 units
units sold 800 units
selling price $150/unit
direct materials $35/unit
direct labor $16/unit
variable manufacturing overhead $15/unit
fixed manufacturing overhead $24,000/yr
variable selling/administrative costs $8/unit
fixed selling/administrative costs $15,500/yr
what is the unit product cost for the year using absorption costing?

The unit Product cost is $32.09

Explanation:

$

Add : Direct Material. 35

Add: Direct Labour 16

Prime Cost. 51

Add: variable manufacturing overhead. 15

Add: Fixed manufacturing overhead. 24,000

Production cost. 24,066

To determine the unit Product cost for the year we will divide the production cost by the unit produced

Production cost ÷ unit produced

Since the the production cost is $24,066 and unit produced is 750unit

24,066÷ 750

= 32.088

= 32.09

Therefore the unit Product cost is $32.09