Quates Corporation produces a single product and has the following cost structure: Number of units produced each year 3,000Variable costs per unit: Direct materials$27Direct labor$96Variable manufacturing overhead$1Variable selling and administrative expenses$4Fixed costs per year: Fixed manufacturing overhead$219,000Fixed selling and administrative expenses$153,000Required:Compute the unit product cost under absorption costing.
What will be an ideal response?
| Direct materials | $ | 27 |
| Direct labor | 96 | |
| Variable manufacturing overhead | 1 | |
| Fixed manufacturing overhead ($219,000 ÷ 3,000 units) | 73 | |
| Unit product cost | $ | 197 |
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