Question

Blackbird, Incorporated reports the following information regarding its production cost:
Units produced 39,000 units
Direct labor $13 per unit
Direct materials $17 per unit
Variable overhead $7,800,000 in total
Fixed overhead $9,750,000 in total
a. Compute production cost per unit under variable costing.
b. Compute production cost per unit under absorption costing.
a. $13 DL + $17 DM + ($7,800,000/39,000) VOH = $230 per unit under variable costing
b. $230 + ($9,750,000/39,000) FOH = $480 per unit under absorption costing

Answer

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