Lynch Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations: Variable costs per unit:
Manufacturing:
Direct materials $ 10
Direct labor $ 4
Variable manufacturing overhead $ 1
Variable selling and administrative $ 1
Fixed costs per year:
Fixed manufacturing overhead $ 231,000
Fixed selling and administrative $ 141,000
During the year, the company produced 21,000 units and sold 17,000 units. The selling price of the company’s product is $40 per unit. Assume that the company uses absorption costing. Compute the unit product cost.