Solution-What amount should be considered product cost

What amount should be considered product cost

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Question - During the month of November, ABC Inc. produced 1,000 units of Product A with costs as follows:

Direct Materials P6,000

Direct Labor P3,300

Variable Factory Overhead P2,500

Fixed Factory Overhead P1,500

Total Manufacturing Costs P13,500

Selling and administrative costs incurred during the month were:

Variable selling and administrative P3,000

Fixed Selling and administrative 2,000

Total P5,000

Selling Price per Unit P 20.00

ABC Inc. uses the JIT system. It does not keep inventories in stock.

Required -

1. What amount should be considered product cost for external reporting purposes?

P13.30

P18.30

P11.80

P14.80

2. What is the variable costing per unit for purposes of computing the contribution margin?

P13.30

P18.30

P11.80

P14.80

3. Under absorption costing, income for November 2020 was?

P8,200

P5,200

P6,700

P1,700

Reference no: EM132784079

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What amount should be considered product cost

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