Bungalow Industries Manufactures and Sells Hardware for Homes Such

Multiple Choice

Bungalow Industries manufactures and sells hardware for homes such as door knobs and cabinet pulls.Each door knob sells for $15 per unit and during its first year of operations,Bungalow produced 24,000 units and sold 20,000 units.The company has fixed manufacturing overhead costs of $126,000 and fixed selling and administrative expenses of $32,000.Each door knob has $3.00 of direct materials,$1.00 of direct labor and $.50 of variable overhead.If Bungalow Industries uses absorption costing,what is the manufacturing cost per unit?

A) $4.50
B) $11.08
C) $10.80
D) $5.83
E) $9.75