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Hello students, here is a question.
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Creeps corporation produces a single product.
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Last year, creeps manufactured 20 ,000 units and sold 15 ,000 units.
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Production costs for the year were given i .e.
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$170 ,000.
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Direct labor is $110 ,000.
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Manufacturing overhead is $200 ,000.
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Fixed manufacturing overhead is $240 ,000.
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And the sales totaled are $825 ,000 for the year.
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The variable selling and administrative expenses are $108 ,000.
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Fixed and selling expenses are $165 ,000.
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And also we have a variable costing and absorption costing of $60 ,000 lower than the absorption costing higher than $60 ,000 under absorption costing.
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So we have few options given here.
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We have to choose the right option from this.
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Let us do the solution for this.
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First we need to calculate the variable cost per unit.
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So variable cost per unit is, so we have a direct material of $170 ,000 plus direct labor that is $110 ,000 plus variable manufacturing overhead is $200 ,000.
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When we total up this, we get $480 ,000.
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So therefore it is $480 ,000 divided by 20 ,000 units which gives us 24 per unit...