Reference no: EM132706189
You are given the following data for Serpe Inc., a manufacturer of vanilla vodka-scented face masks.
Direct labor $ 3.50 per unit
Direct materials $ 1.25 per unit
Overhead
Total variable overhead $ 41,400
Total fixed overhead $ 150,000
Expected units to be produced 18,000 units
Problem a) Calculate the total product cost per unit under absorption costing.
Problem b) Calculate the total product cost per unit under variable costing.
Problem c) Tito's Vodka is doing a fundraiser and wants to purchase a 1,000 specially branded vodka face masks to donate. Serpe has sufficient capacity to produce them. How much would you charge Tito's, and why? (Note: There is no specific right answer, don't kill yourself trying to find Tito's in the textbook. Or Serpe.)