Klotz Co. manufactures a dog shampoo called Cleanfur. Relevant data for Cleanfur in January 2013, the first month of production, are as follows:
|
Selling price |
$26 per unit |
|
Units |
Produced 20,000; sold 15,000; beginning inventory zero |
|
Variable manufacturing unit costs |
$10 |
|
Fixed costs |
Manufacturing overhead $140,000 Selling and administrative expenses $30,000 |
The per unit costs under both absorption and variable costing are:
|
Absorption |
||
|
$10 |
$7 |
|
|
$7 |
$10 |
|
|
$17 |
$7 |
|
|
$17 |
$10 |