Meadow Products manufactures synthetic rubber used in automotive components. In 2023, the first year of operations, Meadow produced 6,000 kilograms of rubber and sold 4,500 kilograms. In 2024, the company produced the same amount of rubber and sold 7,500 kilograms (the company sold all of its inventory). In each year, the selling price per kilogram was $1,800, variable manufacturing costs were $350 per kilogram, and variable selling expenses were $250 for each kilogram of rubber sold. Fixed manufacturing costs were $3,000,000, and fixed administrative expenses were $600,000. What is the unit manufacturing cost under absorption costing in year 2023?

Meadow Products manufactures synthetic rubber used in automotive components. In 2023, the first year of operations, Meadow produced 6,000 kilograms of rubber and sold 4,500 kilograms. In 2024, the company produced the same amount of rubber and sold 7,500 kilograms (the company sold all of its inventory). In each year, the selling price per kilogram was $1,800, variable manufacturing costs were $350 per kilogram, and variable selling expenses were $250 for each kilogram of rubber sold. Fixed manufacturing costs were $3,000,000, and fixed administrative expenses were $600,000. What is the unit manufacturing cost under absorption costing in year 2023?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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