Multiple Choice QuestionLoudon Company has the following unit costs: direct materials $6, direct labor $3, variable overhead $2, fixed overhead $1. Under absorption costing, total unit cost is:Multiple choice question.$11$12$8$9
Question
Multiple Choice QuestionLoudon Company has the following unit costs: direct materials 3, variable overhead 1. Under absorption costing, total unit cost is:Multiple choice question.129
Solution
To calculate the total unit cost under absorption costing, you need to add up all the individual costs.
Here's how you do it:
- Direct materials cost: $6
- Direct labor cost: $3
- Variable overhead cost: $2
- Fixed overhead cost: $1
Now, add all these costs together:
3 (direct labor) + 1 (fixed overhead) = $12
So, under absorption costing, the total unit cost is $12.
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