Kyle corporation produces a single product and has the

Question

Kyle Corporation produces a single product and has the following cost structure:

Number of units produced each year:                                         1,000

Variable costs per unit:

   Direct materials                                                                 $41

   Direct labor                                                                         $36

   Variable manufacturing overhead                                             $ 4

   Variable selling and administrative expenses             $ 1

Fixed costs per year:

   Fixed manufacturing overhead                                      $46,000

   Fixed selling and administrative expenses                              $60,000

Required:

1. Compute the unit product cost under absorption costing. Show your work!

2. Compute the unit product cost under variable costing. Show your work!