Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year. Units produced this year 25,000 units Units sold this year 15,000 units Direct materials $ 9 per unit Direct labor $ 11 per unit Variable overhead $ 3 per unit Fixed overhead $ 137,500 in total Given Advanced Company's data, compute cost per unit of finished goods under variable costing. Group of answer choices

cost per unit =  $28.50

Explanation:

given data

beginning inventory amount = 0

Units produced = 25,000 units

Direct materials = $9 per unit

Direct labor  = $11 per unit

Variable overhead  = $75,000

Fixed overhead = $137,500

solution

we know that Under all absorption cost, all the type of cost is fixed or variable

so that we get cost per unit of finished goods that is

cost per unit = Total cost ÷ units produced  1

here

total cost  = direct material + direct labor + variable overhead + fixed overhead   2

put here value

total cost =  $9 × 25,000 units + $11 × 25,000 units + $75,000 + $137,500

total cost = $225,000 + $275,000 +$75,000 + $137,500

total cost = $712,500

so put here value in equation 1 we get

cost per unit =  $712,500 ÷ 25,000

cost per unit =  $28.50

so the cost per unit of finished goods under absorption costing is $28.50

answersupplies;

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