Gyro Industries makes hub caps for the car industry. Direct materials are $12 per unit, while direct labour is $2.00 per unit. Variable overhead is $0.50 per unit and fixed overhead is $500,000 per year. Gyro produces 100,000 hub caps per year. 80,000 hub caps were sold this year.
What is the cost per hub cap under absorption costing?
$20.75
$14.00
$14.50
$19.50
Ariana Corp. makes pencils. The actual and budgeted overhead for the year was $350,000. The company produced 5,000,000 pencils during the year and sold 4,760,000 pencils. The cost per batch of 1,000 pencils is as follows:
|
Direct materials |
$20 |
|
Direct labour |
$10 |
|
Variable overhead |
$5 |