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McIntyre Manufacturing produces a single product. Last year, the company produced 20,000
units, out of which 18,000 were sold. There were no units in beginning inventory. The company
had the following costs:
A. Calculate McIntyre's product cost per unit, assuming that the company uses variable
costing
B. Calculate McIntyre's product cost per unit, assuming that the company uses absorption
costing
C. Calculate McIntyre's total period cost, assuming that the company uses variable cosing
D. Calculate McIntyre's total period cost, assuming that the company uses absorption
costing
Variable cost per unit:
Production $10.00
Sales and Administrative $4.00
Fixed Costs (total)
Production $40,000
Sales and Administrative $20,000
Solution
Hi,
Please find the detailed answer as follows:
Part A:
Unit Product Cost (Variable Costing) = Variable Production Cost Per Unit = $10 per unit
--
Part B:
Unit Product Cost (Absorbtion Costing) = Variable Production Cost Per Unit + Fixed
Production Cost Per Unit = 10 + 40000/20000 = $12 per unit
--
Part C:
Total Period Cost (Variable Costing) = Fixed Production Cost + Variable Sales and
Administrative + Fixed Sales and Administrative = 40000 + 18000*4 + 20000 = $132000
--
Part D:
Total Period Cost (Absorbtion Costing) = Variable Sales and Administrative + Fixed Sales
and Administrative = 18000*4 + 20000 = $92000
Thanks.

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McIntyre Manufacturing produces a single product- Last year- the compa.docx

  • 1. McIntyre Manufacturing produces a single product. Last year, the company produced 20,000 units, out of which 18,000 were sold. There were no units in beginning inventory. The company had the following costs: A. Calculate McIntyre's product cost per unit, assuming that the company uses variable costing B. Calculate McIntyre's product cost per unit, assuming that the company uses absorption costing C. Calculate McIntyre's total period cost, assuming that the company uses variable cosing D. Calculate McIntyre's total period cost, assuming that the company uses absorption costing Variable cost per unit: Production $10.00 Sales and Administrative $4.00 Fixed Costs (total) Production $40,000 Sales and Administrative $20,000 Solution Hi, Please find the detailed answer as follows: Part A: Unit Product Cost (Variable Costing) = Variable Production Cost Per Unit = $10 per unit --
  • 2. Part B: Unit Product Cost (Absorbtion Costing) = Variable Production Cost Per Unit + Fixed Production Cost Per Unit = 10 + 40000/20000 = $12 per unit -- Part C: Total Period Cost (Variable Costing) = Fixed Production Cost + Variable Sales and Administrative + Fixed Sales and Administrative = 40000 + 18000*4 + 20000 = $132000 -- Part D: Total Period Cost (Absorbtion Costing) = Variable Sales and Administrative + Fixed Sales and Administrative = 18000*4 + 20000 = $92000 Thanks.