I'm stuck on this absorption costing question...
Star Suede Shoe Company produced 100,000 pairs of shoes and sold 70,000 in its first year of operations. There was no Work In Progress Inventory at year end. Its costs for that year were as follows:
-Direct Materials 441,000
-Direct Labour 325,000
-Variable Manufacturing Overhead 160,000
-Variable Selling and Admin Expenses 225,000
-Fixed manufacturing overhead 254,000
-Fixed selling and admin expenses 220,000
a)compute the cost of one unit if the company uses variable costing
b)compute the cost of one unit if the company uses absorption costing

... I've seen examples of these types of questions, but they all have the selling price given. How do you go through the calculations without the sales? Help please :)

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Originally Posted by circletoe

Which part are you stuck on?

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I can't seem to figure out how to get the unit cost by variable costing or absorption costing without the selling price.

I thought for absorption costing you would add the total variable costs to total fixed manufacturing expenses divided by current sales, but that doesn't seem to give me the right answer. Variable cost should simply be the total of the variable costs?