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Question(s) / Instruction(s):

Erie Company manufactures a single product. Assume the following data for the year just completed:

Fixed Cost in Total:

Selling and Administrative            $60,000

Production                                          $82,500

Variable Cost per unit:

Selling and Administrative            $5

Production                                          $8

There were no units in inventory at the beginning of the year. During the year 30,000 units were produced and 25,000 units were sold. Each unit sells for $35.

Under absorption costing, the unit product cost would be:

a)            $8.00

b)            $17.75

c)            $13.00

d)            $10.75

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