Donovan Company incurred the following costs while producing 500 units: direct materials, $10 per unit; direct labor, $25 per unit; variable manufacturing overhead, $15 per unit; total fixed manufacturing overhead costs, $10,000; variable selling and administrative costs, $5 per unit; total fixed selling and administrative costs, $7,500. There are no beginning inventories. What is the unit product cost using absorption costing? a. $50 per unit b. $55 per unit c. $70 per unit d. $90 per unit

Principles of Accounting Volume 2
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Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 14EB: Crafts 4 All has these costs associated with production of 12,000 units of accessory products:...
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Donovan Company incurred the following costs while producing 500 units: direct materials, $10 per unit; direct labor, $25 per unit; variable manufacturing overhead, $15 per unit; total fixed manufacturing overhead costs, $10,000; variable selling and administrative costs, $5 per unit; total fixed selling and administrative costs, $7,500. There are no beginning inventories.

What is the unit product cost using absorption costing?

a. $50 per unit

b. $55 per unit

c. $70 per unit

d. $90 per unit

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