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Question - A manufacturer reports the following costs to produce 19,000 units in its first year of operations: Direct materials, $19 per unit, Direct labor, $15 per unit, Variable overhead, $190,000, and Fixed overhead, $285,000. The total product cost per unit under absorption costing is:
$34 per unit.
$44 per unit.
$59 per unit.
$49 per unit.
$29 per unit.
Discuss if there should be any type of corrective action. How should the company management handle this situation? Feel free to share any situations that sound similar in the real world.
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