Question

Fiendish Friends makes Halloween costumes. The company incurred the following total costs to produce 25,000 costumes.
Direct materials....... $200,000
Direct labor........ 150,000
Variable overhead..... 50,000
Fixed overhead....... 100,000

Required
a. Under the absorption costing method, what is the average unit product cost? Using this method, how much product cost would be recorded on the income statement if
20,000 units were sold?
b. Under the variable costing method, what is the average unit product cost? Using this method, how much product cost would be recorded on the income statement if
20,000 units were sold?



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  • CreatedFebruary 21, 2014
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