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Under absorption costing, a company had the following unit costs when 8,000 units were produced.
Direct labor 8.50 per unit
Direct Material 9.00 per unit
Variable overhead 6.75 per unit
Fixed overhead (60,000/8,000) 7.50 per unit
Total production cost 31.75
Problem 1: Compute the total production cost per unit under variable costing if 25,000 units had been produced.
Option 1: 31.75
Option 2: 27.25
Option 3: 26.25
Option 4: 24.25
Option 5: 17.50
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