Karen Corporation has compiled the following information from the accounting system for the one product it sells:

Question:

Karen Corporation has compiled the following information from the accounting system for the one product it sells:

Sales price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $900 per unit

Fixed costs (for the month)

Marketing and administrative . . . . . . . . . . . . . . . . . . . $108,000

Manufacturing overhead . . . . . . . . . . . . . . . . . . . . . . . $162,000

Variable costs (per unit)

Marketing and administrative . . . . . . . . . . . . . . . . . . . $18

Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $270

Manufacturing overhead . . . . . . . . . . . . . . . . . . . . . . . $60

Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $165

Units produced and sold (for the month). . . . . . . . . . .1,800


Required

Determine each of the following unit costs:

a. Variable manufacturing costs.

b. Variable cost.

c. Full absorption cost.

d. Full cost.


Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Fundamentals of Cost Accounting

ISBN: 978-0078025525

4th edition

Authors: William Lanen, Shannon Anderson, Michael Maher

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