In presenting inventory on the balance sheet December 31, 2021, the unit cost under absorption costing isP2.50P3.00P3.50P4.50 NUBD Company began its operations on January 1, 2021 and produces a singleproduct that sells for P7 per unit. Standard capacity is 100,000 units per year.100,000 units were produced and 80,000 units were sold in 2021. Manufacturingcosts and selling and administrative expenses were as follows:Fixed costsVariable costsDirect materialsDirect laborFactory overheadSelling and administrativeP 1.50 per unit produced1.00 per unit produced0.50 per unit produced0.50 per unit soldP150,00080,000There were no variances from the standard variable costs. Any under or over-appliedoverhead is written off directly at year-end as an adjustment to the cost of goods sold.

The question is based on the concept of Cost Accounting. Under absorption costing Fixed cost as well…

Answered: In presenting inventory on the balance…

In presenting inventory on the balance sheet December 31, 2021, the unit cost under absorption costing is P2.50 P3.00 P3.50 P4.50

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6PA: Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A...

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Question

In presenting inventory on the balance sheet December 31, 2021, the unit cost under absorption costing is

P2.50

P3.00

P3.50

P4.50

NUBD Company began its operations on January 1, 2021 and produces a single
product that sells for P7 per unit. Standard capacity is 100,000 units per year.
100,000 units were produced and 80,000 units were sold in 2021. Manufacturing
costs and selling and administrative expenses were as follows:
Fixed costs
Variable costs
Direct materials
Direct labor
Factory overhead
Selling and administrative
P 1.50 per unit produced
1.00 per unit produced
0.50 per unit produced
0.50 per unit sold
P150,000
80,000
There were no variances from the standard variable costs. Any under or over-applied
overhead is written off directly at year-end as an adjustment to the cost of goods sold.

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