Milton Company reports the following information for the current year: Units pro
ID: 2485682 • Letter: M
Question
Milton Company reports the following information for the current year:
Units produced this year
45,000 units
Units sold this year
53,000 units
Direct materials
$5 per unit
Direct labor
$2 per unit
Variable overhead
$270,000 in total
Fixed overhead
? in total
If the company's cost per unit of finished goods using absorption costing is $18, what is total fixed overhead?
A.
$225,000
B.
$180,000
C.
$270,000
D.
$315,000
E.
$720,000
Units produced this year
45,000 units
Units sold this year
53,000 units
Direct materials
$5 per unit
Direct labor
$2 per unit
Variable overhead
$270,000 in total
Fixed overhead
? in total
Explanation / Answer
Answer: A $225000
Particulars Per Unit 45000 Units Total Cost of Goods Produced $18 $810,000 Less: Direct Material Cost (45000*5) $5 $225,000 Direct Labour (45000*2) $2 $90,000 Variable Manufacturing Overhead: (45000*6) $6 $270,000 Annual Fixed Manufacturing Overhead $5 $225,000