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Honda Heaven produces and sells an auto part for $20.00 per unit. Direct materials are $8 per unit, while direct manufacturing labour averages $1.50 per unit. Variable manufacturing overhead is $0.50 per unit and fixed manufacturing overhead is $250,000 per year. Administrative expenses, all fixed, run $90,000 per year, with sales commissions of $2 per part. Production is 100,000 parts per year. And this year, 75,000 boxes were sold.
Problem 1: What is Honda Heaven's inventory cost per box using variable costing?
Problem 2: What is Honda Heaven's inventoriable cost per box using absorption costing?
Calculate the cost of one unit of product under variable costing. Round to the nearest cent. Calculate the cost of one unit of product under absorption costing
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