Question - Sproull Inc., which produces a single product, has provided the following data for its most recent month of operation:
Number of units produced - 2,000
Variable costs per unit:
Direct materials - $21
Direct labor - $75
Variable manufacturing overhead - $7
Variable selling and administrative expenses - $6
Fixed costs:
Fixed manufacturing overhead - $116,000
Fixed selling and administrative expenses - $40,000
The company had no beginning or ending inventories.
Required:
a. Compute the unit product cost under absorption costing.
b. Compute the unit product cost under variable costing.