Given the following data, calculate product cost per unit under absorption costing. Direct labor $ 27 per unit Direct materials $ 21 per unit Overhead Total variable overhead $ 40,000 Total fixed overhead $ 110,000 Expected units to be produced 60,000 units

Total unitary cost= $50.5

Explanation:

Giving the following information:

Direct labor $ 27 per unit

Direct materials $ 21 per unit

Total variable overhead $ 40,000

Total fixed overhead $ 110,000

Expected units to be produced 60,000 units

The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

Unitary total overhead= (40,000 + 110,000) / 60,000

Unitary total overhead= $2.5

Now, we can calculate the unitary cost of production:

Total unitary cost= 27 + 21 + 2.5= $50.5

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