Answer:
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
