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A small company that produces a single product has the following cost structure:
Number of units produced is 6,000
Direct Materials is $2.00 per unit
Direct Labor is $4.00 per unit
Variable Manufacturing overhead is $1.00 per Unit
Variable selling and Administrative Expenses is $3.00 per unit
Manufacturing Overhead is fixed for $30,000 per year
Selling and Administrative Expenses is $10,000 per year fixed
1.) Compute the unit product cost under absorption costing method.
2.) Compute the unit product cost under variable/marginal costing method.
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