Walters Company manufactures a single product and sells it at $45 per unit. The following costs apply: Variable costs: ⚫ Production: $12 per unit Selling and administrative: $7 per unit Fixed costs: Production: $150,000 Selling and administrative: $90,000 During the year, 25,000 units were produced and 22,000 units were sold. What is the absorption cost per unit? A. $19 per unit B. $18 per unit C. $12 per unit D. $24 per unit

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
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Walters Company manufactures a single product and sells it at $45 per unit. The following costs
apply:
Variable costs:
⚫ Production: $12 per unit
Selling and administrative: $7 per unit
Fixed costs:
Production: $150,000
Selling and administrative: $90,000
During the year, 25,000 units were produced and 22,000 units were sold.
What is the absorption cost per unit?
A. $19 per unit
B. $18 per unit
C. $12 per unit
D. $24 per unit
Transcribed Image Text:Walters Company manufactures a single product and sells it at $45 per unit. The following costs apply: Variable costs: ⚫ Production: $12 per unit Selling and administrative: $7 per unit Fixed costs: Production: $150,000 Selling and administrative: $90,000 During the year, 25,000 units were produced and 22,000 units were sold. What is the absorption cost per unit? A. $19 per unit B. $18 per unit C. $12 per unit D. $24 per unit
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