Question

LuLu’s Lockets manufactures a single product, a diamond locket. Last year, the company produced 4,000 lockets and sold 3,500 of them. They had no lockets at the beginning of the year. The company has the following costs:
Variable costs per unit:
Production $ 4.00
Selling and administrative $ 1.00
Fixed costs in total:
Production $12,000
Selling and administrative $ 8,000

Required
Calculate the unit product cost, assuming that the company uses absorption costing.



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  • CreatedMarch 11, 2015
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