Question

Assume a company had the following production costs:
Direct labor $2 per unit
Direct material $3 per unit
Variable overhead $4 per unit
Total variable $9 per unit
Fixed overhead ($50,000/10,000 units) $5 per unit
Total production cost $14 per unit
Under absorption costing, the total product cost per unit when 4,000 units are produced would be $22.50.

Answer

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