HELP IN ACCOUNTING JUNE 06 PAPER 1 Q29

[arvind0708]

29 A company manufactures a single product with a selling price of $75 per unit. The table shows
the costs, based on sales and production volume of 8000 units.
$ 000
prime costs 158
variable manufacturing overheads 74
fixed manufacturing overheads 80
variable selling overheads 20
fixed administration overheads 100
If absorption costing is applied, what is the gross profit on each unit sold?
A $21.00 B $36.00 C $43.50 D $46.00

HOW TO GET THE ANSWER

 

[Roadster 125]

Assalam o allikum...
Friend IN absorption costing
for Cost of production we Include the following items
Variable manufacturing overheads 74
Fixed Manufacturing overheads 80
prime costs 158
Total cost 312
Now divide the Total cost by number of units = 312000/ 8000
= 39
Gross profit = Selling price - Cost of production
= 75 - 39
= $ 36
So , option B is the Correct Answer
THANK YOU =)