Question

Sena (Pty) Ltd, which manufactures a single product, has provided the following information for March 2019:

Selling price per unit: R 150

Units in opening inventory: Nil

Units manufactured: 9500

Units sold: 9250



Variable cost per unit:

Direct materials: R 30

Direct labour: R 45

Variable manufacturing overhead: R 18,40

Variable selling and admin: R 13,20

Fixed costs:

Fixed manufacturing overheads: R 97 850

Fixed selling and admin: R 31 500



The unit product costs for March 2019 using the absorption costing method:






R 75


R93,40


R106,60


R103,70

Answer 1

To calculate the unit product cost for March 2019 using the absorption costing method, you need to include both the variable and fixed manufacturing costs per unit.

### Given Information:

1. **Variable Costs:**
- Direct materials: R 30
- Direct labour: R 45
- Variable manufacturing overhead: R 18.40

**Total Variable Cost per Unit:**

\[
\text{Total Variable Cost per Unit} = \text{Direct Materials} + \text{Direct Labour} + \text{Variable Manufacturing Overhead}
\]
\[
= R 30 + R 45 + R 18.40 = R 93.40
\]

2. **Fixed Manufacturing Overheads**: R 97,850
3. **Units Manufactured**: 9,500 units

**Fixed Manufacturing Cost per Unit:**

\[
\text{Fixed Manufacturing Cost per Unit} = \frac{\text{Total Fixed Manufacturing Overheads}}{\text{Units Manufactured}}
\]
\[
= \frac{R 97,850}{9,500} \approx R 10.31
\]

### Calculate Total Unit Product Cost Using Absorption Costing:
Now, add the variable cost per unit and the fixed cost per unit to find the total cost:

\[
\text{Total Unit Product Cost} = \text{Total Variable Cost per Unit} + \text{Fixed Manufacturing Cost per Unit}
\]
\[
= R 93.40 + R 10.31 = R 103.71
\]

### Conclusion:
Rounding to two decimal places, the unit product cost for March 2019 using the absorption costing method is **R 103.70**.

So the correct answer is **R 103.70**.